TLOMA Today

The old quote suggests that April showers bring May flowers.   We had a freakish snowstorm on March 22^nd that brought over 10cm of snow in the GTA, so I’m all in favour of changing it to April sun brings May fun.   I know I’m itching to play golf outside!

Also with the completion of March, many of us will have T5013’s, auditors, LSO Annual Report & the CRA in our rear view mirror. Good riddance.

In line with our 2024 Strategic Plan, the TLOMA Board of Directors tasked the Membership Task Force with crafting a survey to assess membership criteria, collect insights from our members, devise strategies to enhance association offerings, deliver greater value, and foster increased membership participation and expansion.

To this end, don’t forget to complete the TLOMA 2024 Membership Survey circulated last Wednesday.  If you would like to be entered into a draw prize for a $75 Everything Gift Card, I invite you to participate in the survey.

April 14 to April 20 is National Volunteer Week.   I want to take this opportunity to personally thank all countless TLOMA volunteers who graciously contribute their time to the association.   Without them, we would never be able to be as successful as we are.   We all appreciate you!

We have several events coming up in the next few months with interesting SIG’s, PD events and networking events. Check out each event below, and be sure to register:

April 4, 2024 - 2024 Compensation Surveys Launch Meeting
April 10, 2024 - POSTPONED TO A FUTURE DATE: - TLOMA Joint Facilities & Technology SIG Event - Cut the Chaos, Boost Efficiency: Modern Workplace Tech Solutions for Law Firms
April 18, 2024 - Finance SIG Event - LAWPRO Claim Trends and Updates - What You Need to Know for 2024
New Date:  April 24, 2024 -  Joint Facilities & Technology SIG Event - Cut the Chaos, Boost Efficiency: Modern Workplace Tech Solutions for Law Firms
April 30, 2024 - Human Resources SIG Event - Ask an Employment Lawyer: Bill 149 - Pay Transparency, AI in Recruitment, Competition Act and more
May 8, 2024 - Professional Development Event - Feeling Confident in our Digital Cultures: Artificial Intelligence, Communications, and Tech for Everyday Work

Check out each event and be sure to register.

In the highly competitive and demanding world of law, a positive and healthy work culture is critical. The impact of a positive culture is not limited to the lawyers but clearly has a direct effect on the productivity of the staff, too. A positive culture in a law firm will drive:

• People satisfaction, 
• Productivity, and, 
• Ultimately, success. 

Law firms can create a positive culture by fostering the following:

An atmosphere of respect - A positive culture in a law firm begins with creating a supportive work environment where lawyers and staff alike feel valued, respected, and empowered. Encouraging open communication, recognizing and rewarding achievements, and providing opportunities for development can all contribute to a sense of belonging and engagement among all law firm personnel. When people feel supported and appreciated, they are more likely to be motivated, productive, and loyal to the firm.

Collaboration at both the lawyer and staff levels - Effective teamwork is essential in the legal profession, where cases often require a multidisciplinary approach. A positive culture in a law firm encourages collaboration among team members, fostering a sense of unity and shared purpose. By promoting open dialogue, sharing knowledge and expertise, and working together towards common goals, both lawyers and staff can leverage each other's strengths and achieve better outcomes for the clients.

The desired level of engagement and support - Diversity and inclusion are essential components of a positive culture in a law firm. Embracing diversity in all its forms – including race, orientation, gender, age, background, and perspective – can create a more prosperous and dynamic workplace where different ideas and viewpoints are valued. By fostering an inclusive culture where everyone feels respected and supported, law firms can attract and retain top talent, drive innovation, and better serve a diverse client base.

Flexibility - A reasonable work-life balance is critical for the well-being and productivity of a law firm. A positive culture promotes flexibility, autonomy, and understanding when it comes to balancing work commitments with personal and family responsibilities. By encouraging lawyers and staff to take time off, prioritize self-care, and recharge, law firms can reduce burnout, increase job satisfaction, and improve overall performance.
By fostering an environment of respect, collaboration, diversity, and work-life balance, law firms can create a workplace where people thrive. 
There are other direct benefits achieved from investing in a positive culture, including clients receiving exceptional service and the firm achieving success and a highly desired reputation. As the legal profession continues to evolve, law firms that prioritize building and maintaining a positive culture will undoubtedly be better positioned to attract and retain top talent, drive innovation, and deliver exceptional service to their clients. 

Many firms continuously seek to create that competitive difference by engaging outsiders and spending a lot of money and time trying to achieve it. The less expensive but much more practical solution is to build a positive culture from the inside out.

By recognizing the value of a positive work environment and making it a priority, law firms can create a culture that is recognized and envied both internally and externally. 

David Cummings captured the concept of the simplest way to create a sustainable competitive advantage with a quote attributed to him – "… culture is the only sustainable competitive advantage that is completely within the control of the entrepreneur."¹ 

While technology and new compliance regulations are growing at an alarming rate, legal practices are confronting the complexities of data handling, especially as they shift towards digital and cloud-based systems for managing documents. The surge in data volume brings increased responsibilities, not only in managing the costs associated with storage and data transfer but also in protecting the confidentiality of client data against bad actors. This article is part 1 of an examination of the strategy of data minimization, an approach to managing data that focuses on keeping only the information that is essential and relevant for clearly defined, lawful reasons. We will discuss how data minimization not only leads to a reduction in storage expenses and strengthens cybersecurity efforts but also aligns with privacy regulations, thereby reducing both legal and reputation-related risks for legal firms.

Data minimization serves as a critical factor for any entity that deals with sensitive information. This holds particularly true for legal firms, the guardians of highly sensitive personal and corporate information. In the sections that follow, we will explore the concept of data minimization, defining it, outlining its fundamental principles, and discussing its importance for legal practices. The aim is to demonstrate how adherence to this concept not only ensures legal compliance with rigorous data protection and privacy statutes but also builds trust and strengthens security measures.

The concept of data minimization

The essence of data minimization is deeply rooted in data protection and privacy regulations, urging entities to confine their data collection, preservation, and utilization strictly to the essentials. This principle is especially critical for legal practices, given the delicate nature of the data they manage, such as client details, case documentation, and legal papers. Committing to the principles of data minimization not only facilitates adherence to legal frameworks like the GDPR, CPRA, and various other privacy legislations but also mirrors the best practices in data stewardship and protection.

The importance of data management for legal entities cannot be overstated, given the confidential nature of the data they are entrusted with. The foundation of client confidence is the assurance of privacy and the secure management of their information. By proactively adopting data minimization, legal firms can safeguard client data, diminish the likelihood of data infringements, and preserve the sanctity of legal proceedings. Moreover, this practice equips legal firms to adeptly maneuver through the intricacies of regulatory compliance, affirming their dedication to privacy and data safeguarding.

With a clear understanding of data minimization's core principles and its significance in the legal domain established, let’s shift focus to the concrete benefits this approach delivers to legal practices. Moving beyond a general discussion of data minimization, it becomes important to recognize the practical benefits that underscore how a methodical approach to data management can yield significant advantages. Whether it’s curtailing storage expenses, bolstering cybersecurity defenses, or conforming to complex legal mandates, data minimization influences the operational productivity, security, and compliance stature of legal firms in various ways.

Benefits of data minimization for law firms

Through the strategic removal of redundant, outdated, or trivial (ROT) information, legal practices can decrease the expenses linked to cloud data storage. This reduction in costs has an immediate impact on savings on storage fees while also refining data management efficiencies, ensuring the firm's resources are invested in handling data that genuinely matters to its operations. By implementing data minimization, firms effectively shrink the potential targets for cyber threats, safeguarding only the indispensable data. This method streamlines data protection efforts, enabling the deployment of more targeted and potent security strategies designed to defend the most vital data assets. The growing number of privacy regulations, Outside Counsel Guidelines (OCGs), and ISO standards becomes easier to navigate with a data minimization strategy in place. A forward-looking approach like this decreases the likelihood of compliance failures and the penalties they incur and bolsters the law firm's stature as a secure and ethical steward of confidential information.

Data minimization is essential, especially when moving to the cloud. It's important for law firms to carefully plan and prepare before migrating to ensure a smooth process. By focusing on moving only the necessary data to the cloud, firms can achieve a more efficient, cost-effective, and secure transition. This approach lays the groundwork for better data management practices in the cloud.

The significance of data minimization before cloud migration

Prior to transitioning their data storage solutions to the cloud, legal entities are advised to perform an exhaustive evaluation of their data, classifying each dataset by its importance, level of sensitivity, and requisite legal retention periods. This step is a critical element in pinpointing which data segments can be condensed, making the migration to the cloud smoother and guaranteeing the transfer of only the important data. This review helps clean up data storage, cut down migration costs, and establish a strong foundation for effective data management in the cloud.

Developing and implementing strict data sorting and holding policies are crucial for effective data minimization. Legal firms need to sort data by its sensitivity, legal requirements, and value to the firm, setting clear rules for how long to keep each type of data. These policies are key for following privacy laws and securely removing data that's no longer needed.

Moving from the initial steps necessary for data minimization before cloud migration, we now shift our focus towards the sustained efforts required to preserve data minimization practices within cloud settings. This transition from initial preparations to ongoing management highlights the ongoing nature of data minimization as a continuous practice rather than a singular task or one-off project. It's imperative for legal firms to understand and implement strategies and practices that maintain data minimization as a fundamental aspect of their data governance model following migration.

Review and part two preview

Before moving to the cloud, legal firms should thoroughly review their data, sorting it by importance, sensitivity, and legal retention needs. This step is key for focusing on essential data only, making the cloud move smoother and more cost-effective. It also prepares the ground for better data management in the cloud.

Setting up and following strict rules for data sorting and holding is critical for effective data minimization. Firms need to organize their data by its sensitivity and legal importance, deciding how long to keep each type. These rules are vital for meeting privacy laws and safely getting rid of unnecessary data.

Wrapping up this part on data minimization and its role in cloud migration, we look ahead to keeping up these efforts in the cloud. This means continuing to focus on data minimization as a regular part of managing data after the move.

In the next part, we'll explore how to keep applying data minimization in the cloud, including practical steps and the challenges firms might face. Our exploration will encompass:

• Ongoing data minimization in cloud environments: Strategies for continuous data assessment and minimization to ensure data stored in the cloud remains necessary, relevant, and compliant with evolving legal standards.
• Practical steps for implementing data minimization: A guide to developing and executing a data minimization strategy, including tools and processes that can aid legal firms in this endeavor.
• Challenges and considerations: An examination of the obstacles legal practices may face in implementing and sustaining data minimization efforts, from technological limitations to organizational culture shifts.

LegalRM are presenting a series of webinars on this topic. You can register for our first educational masterclass, ‘Optimizing efficiency and cost – Mastering DMS cloud migration strategies’, by clicking here.

One might initially think that following the Law Society’s bookkeeping rules is just about avoiding fines and suspensions. However, these rules offer more benefits than just dodging penalties and punishment. They can significantly improve how a law firm operates. In this article, we'll explore some of the rules from the Law Society of Ontario (LSO) and how they directly help a firm's business.

Focus on By-Law 9 

At the heart of LSO's sixteen By-Laws, By-Law 9 — "Financial Transactions and Records" — is crucial. This rule emphasizes the importance of keeping accurate financial records. Accurate financial records offer direct benefits to the firm beyond just compliance. Benefits include streamlined billing, improved revenue recognition, managing expenses, and optimizing cash flow within the firm.

Ensuring Trust Fund Integrity 

Part IV of By-Law 9 deals with trust account transactions. At a glance, some of these guidelines — like depositing trust monies immediately or never withdrawing more than what's available for a client — seem like common sense. However, mistakes can happen. Following these rules helps firms avoid them. Adherence to Trust fund integrity can also lead to enhanced client satisfaction, particularly at billing. Client satisfaction can lead to referrals and repeat clients.

Embracing Electronic Transfers 

The rise of electronic transfers highlights the importance of Paragraph 4 of By-Law 9. In today's world, traditional cheques are being replaced by e-transfers. Basic transaction records are not enough for these transfers. That's where the Electronic Trust Transfer Requisition (Form 9A) comes in. Without this, retracing source information for these transactions during audits would be a logistical nightmare. Additionally, this document is useful to your legal bookkeeper when completing your month-end reconciliations – it enables them to work more autonomously by having this information, which means less time posing questions about transactions to you and/or your staff and it gives the bookkeeper the ability to work more quickly.

Beyond By-Law 9 

Looking beyond By-Law 9, By-Law 8 stands out. This rule requires law firms to submit an annual report by March 31 each year. Completing this annual requirement is not just about checking this off a list. Beyond the fact that punctual, and accurate filing protects the firm from potential administrative suspensions, this mandate offers firms an opportunity for a yearly health check as it pertains to their Trust accounts.

Enhancing Business Operations Through Compliance 

In summary, following the LSO bookkeeping rules goes beyond just meeting legal requirements. It significantly improves a law firm's operations with:

 1. Managing cash flow efficiently.
 2. Preparing for audits more easily.
 3. Making informed business decisions.
 4. Maintaining a good reputation and service quality, which helps attract and retain
     clients.
 5. Increasing profitability.
 6. Managing expenses better.
 7. Having up-to-date financial information for analysis.
 8. Improving overall efficiency.

Conclusion: The Bigger Picture for Law Firms

Instead of seeing compliance with LSO's bookkeeping rules as just a legal requirement, it's much more beneficial to see it as an essential component of a law firm's business. Clean and precise bookkeeping, as required by the Law Societies, gives a clear picture of how the firm is doing and helps in making smart business decisions. By following these rules, firms not only stay within the law, but also enhance their financial management, build strong client relationships, and set themselves up for long-term success. Ultimately, these rules are essential for positive growth and resilience, going beyond mere regulatory compliance. To put it another way, they are not just about avoiding negative consequences; they're about leading to positive outcomes.

Technology has changed the way law firms operate. This progress isn’t limited to better internal communications and paperless offices: it has also reshaped client interactions for the better. Since the client-lawyer relationship is a critical one, it’s important to keep the momentum going. This blog shows you how to make the most of these changes while preserving confidentiality and data security through stronger IT services and support.

Improved Communication
Gone are the days when the only way to discuss a case was through face-to-face meetings or phone calls. Now email, messaging apps, and video conferencing have become standard. This means clients can reach out to their lawyers at their convenience, leading to faster responses and more fluid communication. The key is to make sure that these communications are secure and maintain client confidentiality.

Access to Information
Many law firms now use client portals where individuals can log in to view the status of their case, access documents, and receive updates. This transparency fosters trust and keeps clients informed about the progress of their matters without needing to contact their lawyer directly. Like communication mediums, these platforms need to be regularly monitored and maintained to ensure security.

Document Management
Electronic document management systems allow for the efficient organization, storage, and retrieval of case files. This not only makes it easier to manage case-related documents but also reduces the risk of losing important paperwork. Secure document sharing through these platforms also ensures sensitive information is protected.

Efficiency and Productivity
Technology has automated many routine tasks, from scheduling meetings to generating documents. This automation reduces the time you spend on administrative work, allowing you to focus more on client needs. It also means that tasks are completed more quickly, improving overall efficiency, productivity, and client satisfaction.

Legal Research
Advanced search tools and databases have transformed legal research, making it faster and more accurate. You can now access a vast amount of legal precedents and legislation online, enabling you to build stronger cases for clients. This directly impacts the quality of legal advice and representation clients receive.

Challenges and Considerations
Despite these benefits, the shift towards technology-driven services requires careful oversight. Security is a major concern, as the exchange of sensitive information online poses risks. Law firms should invest in robust security measures to protect client data. This includes encryption, secure client portals, and training for staff on cyber security best practices.

The Role of IT Services
IT services offered by companies like Inderly IT play a vital role in supporting law firms through this transition. These services provide the necessary infrastructure, security, and support to implement technology solutions safely and effectively. They also ensure that law firms have access to the latest tools and that client data is securely managed. Many also offer training and support, helping lawyers and their staff make the most of these technologies.

What’s the Bottom Line?
The impact of technology on client-lawyer relationships is profound and overwhelmingly positive. Improved communication, accessibility, and efficiency are just a few of the ways technology is enhancing the way lawyers interact with their clients. By utilizing IT services, law firms can successfully adopt these opportunities, ensuring their services are secure, efficient, and client-centered.

As we move forward, it's clear that technology will continue to play a crucial role in the legal sector. Law firms that embrace these changes and invest in the right support will be better positioned to meet their clients' evolving needs, improve satisfaction and foster stronger relationships.

If you would like to learn more about cloud-based client portals, document sharing or other IT tools for law firms, head to our website for short informational videos.

The winning strategy of being one of one drives value and growth.

Leading law firm. Full service. Client focused. These throw-way platitudes are hallmarks of those who are indistinguishable in the legal services market and, as a result, are doomed to compete.

Be distinct. Stop competing. Own your market.

These are the hallmarks of smart and sustainable business.

Be Distinct

Distinct means being different from something else of a similar type.

According to the Federation of Law Societies of Canada, “Canada’s 14 provincial and territorial law societies govern over 136,000 lawyers, Quebec’s 4,200 notaries and Ontario’s 10,600 independent paralegals...” That’s a lot of legal talent, law firms, and legal service businesses, all of whom can be distinct from each other.

Lawyers as individuals are not homogeneous, neither are law firms or legal service businesses. And yet dull, stale, and insipid descriptions, offerings, and brands are the rule, not the exception.

But why?

Anyone who works with lawyers can tell you that they tend to be risk-averse yet competitive, reactionary instead of proactive, and rely on past precedents rather than forecast future states. This is why attempting to alter lawyerly traits is often as successful as a leopard changing its spots. However, leopards have unique spot markings that make an individual distinctive from others of its kind.

Similarly, every lawyer, law firm, and legal service business has a uniquely distinctive trait. Sometimes, it’s buried under platitudes and puffery, legacy and fantasy, and oddly enough, fear of being wildly successful that begets sameness, insecurity, and playing small. Other times, distinctiveness hides in plain sight having been dismissed due to familiarity.

The goal is to find the nut of distinctiveness. Doing so means gently peeling away all that is ancillary until the differentiating nut is revealed. Once honed and polished, that differentiating nut becomes your distinction upon which your business is built. 

Stop Competing

Competition is distracting, exhausting, and expensive. It leads to becoming a commodity that unless your practice is geared for it, will fast become a competitive race to the bottom in terms of discounts and lower fees, narrow profit margins and collection write-downs or write-offs, and expectations of higher billable hours that lead to increased stress and accelerated burnout. 

Here’s the secret to beating the competition: Stop competing.

Scary? Perhaps. Doable? Totally. The key is re-engineering using data and science, goodwill and grit, and patience and peoplepower.

Here's an example outside of the legal services industry, but with an objective and strategy applicable to it. Tactics, of course, differ.

Prior to entering the legal field, I spent 14 years in the broadcast industry. My last mandate was to turn around the news division of a television network’s flagship station that had endured consistently low ratings and revenues since its inception in 1975. This station was also battle-hardened after emerging from the longest strike in Canadian broadcast history and as a workplace, was considered career poison.

The objective was to build viewership that would increase ratings leading to higher fees for advertising, and to restructure and complete this turnaround within three to five years.

Traditional wisdom was to emulate the market’s #1 station and beat it at its own game. That strategy was flawed since the #1 station had wealth, resources, and talent in abundance. We didn’t.

Our turnaround strategy was to be distinct and not compete.

Tactics included covering local news to the exclusion of all else, producing shorter stories that converted to delivering more news faster, shifting ads to appear later in newscasts enabled the critical trifecta of news, weather, and sports to be delivered in the first 15 minutes, which was the only time period measured during ratings seasons, redesigning from stodgy to sleek, refreshing talent, and numerous other changes.

Being local, fast, and sleek made us distinctive and the results were dramatic. In 19 months, the station ranked #1 for late night news with an 8.57 per cent audience increase. For evening news, rankings jumped from a low #3 to high #2 with a 45.94 per cent audience increase. The news staff doubled and there was no increase in budget due to creative financial allocation.

During the following five months, the turnaround process transitioned to maintenance having undergone a total restructuring, repositioning, renaming and rebrand.

This successful turnaround was achieved in 24 months, which was much faster than the mandated three to five years. In addition to being a money-making ratings champ, the station enjoyed an energetic culture with a growth trajectory and had become a mecca for attracting more talent than it could ever hire. It remains successful and solvent to this day.

All because it became and continues to be distinct in local and regional markets as well as across the country.

This type of re-engineering is not unique to the broadcast industry. I have applied similar strategies in the legal services industry enabling law firms, legal service business, and individual lawyers to become distinctive and one of one.

Own Your Market

“Hell is other people” is a famous line from Jean-Paul Sartre’s play No Exit, a depiction of the afterlife in which three deceased miscreants are punished by being locked in a room together for eternity. Sometimes I wonder if that phrase applies to law firm competition.

Recently I was asked to name a currently distinctive Canadian BigLaw corporate and commercial law firm. After 25 years in the legal field, you’d think I could name a standout. I couldn’t, which was its own commentary.

There was a time years ago when major Canadian corporate and commercial law firms were distinctive for unique services and strengths. However, those hallmarks have been lost to mergers, expansions, and adoptions of a smorgasbord of services that have morphed many of those firms into sameness.

Now, unless one is familiar with the inside workings and cultures of these firms – which have differences yet are not distinctive – and is looking at them from the market’s perspective, it’s hard to tell the players without a program and nobody wears team jerseys.

The only distinctive law firm I could identify was Mishcon de Reya, a UK-based firm that I’ve watched closely since 2002 and wrote about in 2010 when, dovetailing to its strategy and brand, it launched a unique website that was Google-like in design, programming, function, and results.

Mishcon continues to forge a one of one uniqueness that is distinct for various reasons. For example, when it acquired Flex Legal in January 2024, that action was on target, on brand, and underscored its distinctiveness.

But they’re them. You’re you – whether you are an individual, law firm, or legal service business.

Never copy. “Imitation is the sincerest form of flattery that mediocrity can pay to greatness,” said Oscar Wilde who, to simplify his point stated, “Be yourself; everyone else is already taken.”

This is exactly why those who hone distinctiveness don’t have competition and own their markets.

They do so by being One and Only. You can, too.

 

Introducing a monthly recurring article featuring our collaboration with Mitesh Velani, CFO of WeirFoulds LLP based in Toronto. Stemming from our successful working relationship, we aim to showcase Mitesh's insights on why law firms should consider an FP&A platform implementation partner. We hope you enjoy this final installment  with Mitesh, offering new perspectives on financial data analytics and emphasizing the value and accelerated ROI achieved by leveraging an external consultancy partner.

Building an Adaptable Solution

Q: How can smaller firms get a foot-hold with considering FP&A in its growth strategy?

The key takeaway for small firms is the importance of accuracy in the initial data entry phase. While the urgency may be to input data swiftly, taking the time to ensure it’s placed correctly from the outset is crucial. This proactive approach eliminates the need for time-consuming reallocations or adjustments post-entry, a practice that has proven to be inefficient, burdensome and hinders growth.

The recommendation for small firms is to invest time and energy upfront in getting the right expertise, whether it’s a financial systems person, a master files expert, or a dedicated role for data accuracy. This proactive investment ensures that financial data is entered correctly the first time, paving the way for more streamlined financial analysis, budgeting, and planning and even reaching out to industry experts for consult with additional guidance and knowledge in how to move forward.

In today’s business landscape, having dedicated roles for maintaining data accuracy is not just beneficial; it’s essential for the efficient operation and growth of small firms.

Leveraging Expert Experience towards Sustainable Scale

Q: How has the experience been with aligning these goals through a Consultancy Partner?

Your team’s expertise has been particularly beneficial in this regard, serving as a valuable extension of our law firm and helping us navigate the complexities of setting up and optimizing these systems. This collaborative approach ensures that we can access the benefits of advanced analytics and profitability analysis without the need for extensive internal resources.

The advantages of bringing together sophisticated reporting, timely information, and external expertise are instrumental in propelling a growing firm towards its larger goals, akin to big law or mid-market counterparts. We appreciate the invaluable support provided by your team in helping us achieve this level of operational excellence.

Looking ahead, our long-term goal is to leverage ProLytics support to enhance our firm’s profitability analysis. We aim to dissect gross margins by departments and practice areas, gaining insights into areas generating revenue and identifying opportunities for strategic investments. ProLytics contribution is pivotal in aligning our goals, fostering transparency, and providing real-time proof of our business’s success.