TLOMAToday - February 2024

February, 2024 | Article

President's Message

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Author Brigitte Mulder

Welcome to February everyone! I always find that January is such a long month and am always happy when February finally rolls around and we are one month closer to spring and warmer weather. This month I officially past the reins on to Pat Carrano, CFO at Loopstra Nixon LLP, as TLOMA’s President for 2024. I step back and become the Past President. The official Handover meeting takes place on February 29^th where we sign all the paperwork for the new board members and do a training session for all incoming board members.

As I reflect on the past year, it’s been a great opportunity to lead the organization and make some wonderful connections. We’ve set a new strategic plan for the next 3 years, and we’ve restructured the organization to set it up for success in the upcoming years.

Our Conference Committee is hard at work planning all the final details for this year’s conference that will be held from September 25^th to 28^th at the Marriott Falls. Members click here to register now. Business Partners click here for registration and sponsorship details.

The upcoming SIG events this month are:

February 8, 2024 - TLOMA Finance SIG - New Trust Reporting Requirements

**Note that this will be held in Person and Via Webinar

Brigitte is the Director of Finance and Administration at Henein Hutchison LLP and her responsibilities include Finance, Technology, Human Resources and Operations. Since joining the firm, she has led many process improvement projects around financial reporting, document management, internal controls, and IT.

Brigitte is a Chartered Accountant and Certified Public Accountant. She has been a senior finance leader for over 15 years with a breadth of experience in multiple industries including Finance Director at many different professional services companies.

Brigitte is a member of The Law Office Management Association (TLOMA) and a member of the CFO Leadership Council. She has previously served on the Board of Directors as Treasurer for a non-profit-for-profit agency called Alternatives for Youth for six years.

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February, 2024 | Article

Illuminating the information governance journey: Effective strategies for stakeholder buy-In

Authors Chris Giles and Christopher L. Hockey

INTRODUCTION

At a time when headlines are dominated by data breaches and the ever-evolving legal landscape, organizations stand at a pivotal crossroads marked by significant risks and opportunities. The realm of information governance has shifted from a silent background player to a frontline strategic necessity. At this intersection, information governance (IG) should move out of the shadow of the organization and emerge as a guiding light, a vital strategy illuminating a path forward

For professionals tasked with pioneering new initiatives in this domain, the creation of a compelling and lucid business case is paramount. In this first piece, Chris Hockey takes on the role of a seasoned navigator, leading you through the intricacies of constructing a business case that not only strikes a chord but also garners the essential support and resources from key stakeholders. In part two, Chris Giles will provide an in-depth exploration of the methodology and the skill of persuasively presenting its importance, pivotal in achieving endorsement for your information governance plans.

FOUNDATIONS OF ADVOCACY

“Formulating a ‘business case’ involves mapping out a detailed blueprint for launching new initiatives,” Chris Hockey notes. “Consider it like designing a building’s foundation,” he elaborates, “with your organization’s leadership as the critical inspectors, to whom you must present a plan that is both structurally sound and financially promising. The pivotal questions are: Why should this matter to them? What benefits does it bring to the table for both them and the organization? What will be the investment, and what rewards can be anticipated? You want to create a story that not only has a financial dimension but also aligns seamlessly with your organization’s objectives, tackling critical concerns of stakeholders such as improving operational effectiveness, adhering to regulatory standards, and safeguarding client data.” Hockey then outlines the essential steps to constructing a solid and persuasive case for an information governance strategy:

Mapping success: Linking IG with your organization’s big picture
Amidst the busy world of daily work, your strategic plan serves as your blueprint, aligning each action and initiative with the overarching aims of your organization. It needs to be more than a list of everyday tasks. It makes sure that everything you decide and do in your department helps achieve the big goals of your whole organization.

Making your information management strategy a key part of your organization's main mission and vision is important. This should not be just an add-on. Doing this makes sure that every step you take in your information governance plan helps move your organization towards its major goals.

The key role of strategic planning
Having a strategic plan is critical when dealing with the broad scope of information governance. Without it, trying to make a business case can feel like you're just wandering around with no clear goal. Think of your strategic plan as a guide that helps you figure out if an idea is just a quick fix or a big step towards the important goals of your organization.

For example, ask yourself if buying the newest technology will really help your organization move forward in digital transformation. Or, think about if changing your services could give you an edge in meeting compliance goals. These kinds of choices need clear direction, and that’s exactly what a well-planned strategy gives you.

Using long term goals to guide your business case
A strategic plan can’t be a mere formality. It's there to ensure that every project you propose is not a proposal for a quick fix but really a step towards building your organization's future. Think of this plan as a flashlight in the dark, showing you the way forward. It makes sure that your ideas keep moving the organization ahead, instead of just reacting to the most recent emergency.

Integrating strategic planning into information governance
For anyone deep into information governance, your strategic plan is your must-have guide. It's all about your ultimate targets and the main principles that lead your team when you face tough challenges. These can be things like dealing with a lot of data, following rules and laws, or managing the constant flow of new information. With this approach, making a business case becomes more than a one-time thing. It becomes a regular part of the way your department shares its story and makes plans for future success.

BUILDING BLOCKS OF THE STRATEGIC PLAN

Mission and vision: The core of information governance
A mission statement for your information governance department acts as its declaration of purpose—defining the 'why' behind each action and decision, providing a clear direction. The vision, on the other hand, is the 'what'—the dream you’re chasing, the distant goal on the horizon.

Goals: Mapping out success in information governance
Setting solid, measurable goals turns the big ideas from your mission and vision into a to-do list of achievements. These goals are targets you’re aiming to hit, and they should match up with the wider goals of your entire organization. Imagine setting a goal to improve your data quality or to hit compliance targets by a certain deadline. This is how you help your organization work more efficiently and manage risks better.

SWOT analysis: Your strategic examining tool
A SWOT analysis puts your strategic plan under a microscope. Every information governance strategy needs to take a good look at what you do best (strengths) and areas for improvement (weaknesses). Then, you have to look out for chances to grow (opportunities) and potential problems (threats). This thorough review shows where your department stands and what the business environment is like, giving you a strong foundation for making smart choices.

Action plans: Your path to success
Action plans are your map, showing you how to get from where you are now to where you want to be. They cover both the final destination and the journey there. They outline what steps to take, what resources you'll need, how long it will take, and how you’ll know you’ve succeeded. Action plans turn your high-level goals into real results through careful planning and execution.

Assembling the puzzle: Crafting a unified strategic plan
Think of making a strategic plan like putting together a puzzle. You have essential pieces—mission, vision, goals, SWOT analysis, and action plans. When you fit them all together, you end up with a complete guide for your information governance department. You want to weave these pieces into your everyday work and make sure they match your organization's big goals. This way, your strategic plan turns into a living, working blueprint that keeps your department moving forward.

Information governance can’t be done right or well without a strategic plan. It helps you create solid business cases, making sure that every project you start is on track and adds to what your department and the whole organization want to achieve. If you're in information governance and need to make a business case, this plan is your go-to guide. It helps you make sure every move you make has a purpose and keeps you heading towards progress.

KEY REASONS FOR BACKING INFORMATION GOVERNANCE PROJECTS

Making a case for information governance boils down to two major points: the financial aspect and managing risks. Understanding and being able to discuss these points is crucial when you’re trying to get approval from those in charge of finances—people who are really focused on making profits and avoiding problems.

Financial reasons: Understanding the money side
Cost savings: Picture your organization's record-keeping running as smoothly as a top-notch engine. Information governance can help save money by making data storage more efficient and getting rid of outdated systems. This frees up resources for projects that really push your organization forward.

Efficiencies: But it's not just about saving money. Making your information more streamlined does more than just clean things up—it also makes your team work faster. Faster access to information, quicker responses, and less time waiting for things to load mean your team can do their jobs more efficiently, without the slowdowns of disorganized data.

Revenue generation: Moving from cutting costs to making money, a strong information governance system does more than save—it opens up new ways to make money. How? By using clean, well-organized data to offer new services to clients or improve the ones you already have. This can make your organization the first choice for clients who value efficiency and innovation.

Safeguarding through IG: Managing risks
Legal risks: Dealing with information comes with big risks. A small mistake can lead to embarrassment, major public relations problems and —it could bring serious legal issues. Information governance acts as your guide through the maze of legal rules, keeping your organization safely within legal boundaries and away from trouble.

Operational risks: But it’s not just legal stuff you need to worry about. Operational problems can slow down or even stop your business’s progress. Good information governance means you have strong plans and processes. So, if things go wrong, you're prepared to deal with it quickly and keep things moving. This kind of readiness is what keeps your business running well, no matter what happens.

Risk avoidance: Steering clear of problems
Avoiding mistakes, especially in following rules, is important. Effective information governance helps you spot possible legal issues early on. By catching these problems early, you can avoid bigger issues, keeping legal troubles and fines from becoming major headaches.

Risk mitigation: Handling problems when they arise
Sometimes, even with the best planning, problems happen. That's where risk mitigation comes in. It’s your backup plan or a safety net. With information governance, you have the right procedures and policies to reduce any harm. This helps you handle difficult situations more effectively.

Connecting money and safety in IG business cases
Chris Hockey puts it this way: “Money and managing risks are really two parts of the same thing. When you cut down costs and make your team work faster, your organization becomes quick and agile—ready to handle any challenges or avoid them before they happen. And, when you’re good at managing risks, you’re doing more than just avoiding problems; you’re also keeping your organization safe from losing money through fines or security issues.”

He wraps up with this thought: “The financial and risk parts of your plan are not small details; they’re the foundation of your information governance business case. Showing how your plan saves money, makes things run smoother, brings in more income, stays out of legal trouble, and handles unexpected situations is what shows how information governance is a key strategic tool that’s critical for keeping your company’s money safe and maintaining a good reputation.”

In the next part of our series, Chris Giles will walk through the building blocks of a business case and provide some examples of how these core components of the business case can be applied to real-world situations within IG.

To find out more watch our ILTA Masterclass: Developing an IG business case and strategic plan. During this session Leigh Isaacs, Senior Director, Information Governance at DLA Piper, and Kandace Donovan, Vice President Operations, North America at LegalRM and Chris Hockey focused on the key elements to consider when developing both and effective methods to communicate them to stakeholders. To view the recording, click here.

Chris Giles is CEO and Founder at LegalRM, which creates market-leading software, services and solutions for records, risk and compliance management and serves some of the world largest law firms as well as blue chip organizations from other industry sectors.

Christopher L Hockey is a subject matter expert in information governance, information management, and records management, and provides consulting to on these topics to firms, product vendors, and consulting groups.

February, 2024 | Article

The Folly of Strategic Planning

Author Heather Suttie

Strategic planning is an oxymoron and as real as the tooth fairy.

Look at the roots of those two words: Strategy is a set of choices that position you to win your key objectives. Plan is a measurable action and/or behaviour set to happen within a specific timeframe.

Strategy is one thing while planning is another, yet these words have been paired together as if they’re a logical fit. They’re not.

Even though the phrase “strategic planning” is bandied about within almost all industries, mostly because it sounds sexy and signals that you might be doing something important, it means nothing and is pretty much guaranteed to have no tangible and lasting result.

Still, lawyers love to engage in “strategic planning” because it offers an opportunity to exercise a typical lawyer-like trait of admiring a problem followed by hatching a solution. Due to competing priorities and short attention spans, this exercise usually culminates in a half-hearted execution of whatever was thought to be a good idea at the time, then withers and dies. The result is that nothing much gets done, advances, or changes.

There is, however, strategy development.

Strategy Development

Strategy development supports your primary objective, which is to win.

Strategy development has four components: Objectives, Strategy, Development, and Planning.

1. Objectives are defined and measurable goals that enable winning a chosen market, field, client, or role.
2. Strategy is a set of near-term, yet visionary choices that position you to win your objectives.
3. Development enables your strategy to accommodate improvements during the process.
4. Planning is a set of actions and behaviors that must happen within a specific time period to support your strategy and realize your objectives.

So, in a nutshell: Objectives are where you want to be. Strategy is how you will get there. Planning is what you will do to make it happen. Development bridges strategy and planning, and enables flexibility to meet your objectives within a set timeframe.

The reason why “strategic planning” is an oxymoron that is predisposed to failure is because it focuses on only two of the four factors that enable you to win.

The process of strategy development, however, is geared for growth and applicable to firms, practice groups, industry teams, and individuals.

Transformational growth and market distinctiveness is crystallized when objectives are supported by strategy along with executed tactics that are clear, measurable, and time-bound.

When a Plan is Just a Plan

Oftentimes, rather than tackling the hard work of strategy development, the default is to focus on planning, which is simply a set of actions and behaviors that need to happen within a specific time period. This type of planning is used primarily for business development, budgeting, and the like because it is safe. Safety is manifested by containment within bounds of a traditional law firm’s framework and comfort zone.

Because this type of planning is safe, it is not usually distinctive or strategic, and almost never converts to achieving a defined and measurable objective that results in rapid and exponential growth.

In his 2013 book, Playing to Win: How Strategy Really Works, Roger L. Martin, writer, strategy advisor, and Professor Emeritus at the Rotman School of Management at University of Toronto, hypothesized that a plan is not a strategy.

He is right. His thinking on strategy is refreshing, not because it mirrors my own, but because he addresses what strategy is and isn’t head-on with clarity and forthrightness.

Objectives and Development

Strategy is nothing without clear and ambitious objectives designed to achieve exponential business growth. (In my experience, the most audacious objectives result in the greatest likelihood of achievement because they require collaboration, focus, and urgency that when combined, results in maximum propulsion.) This is why setting ambitious or audacious objectives requires equal amounts of vision, ruthlessness, and diplomacy. And while this carries a hint of living dangerously, it’s entirely doable.

Development provides flexibility to accommodate improvements and enables course correction. Without flexibility, strategy becomes rigid in structure and non-collaborative in nature with both characteristics guaranteed to lead to failure. That said, development must be tempered with get-it-done timelines and determination, otherwise the risk to achieving objectives is wickedly high. Within law firms in particular, over-development—often due to over-thinking and the curse of “too many cooks in the kitchen”—can result in analysis paralysis and death by a thousand committees.

A prevalent symptom is when law firms, practice groups, industry teams, and/or individual lawyers have trouble selecting objectives that will rapidly advance and grow business. I could have retired years ago if I had a dollar for every time a managing partner told me, “Our priorities are A, B, and C. Also, D, E, and F. And while I think of it: G, H, and I. And if we don’t include J, K, and L, all hell will break loose.”

Objectives are priorities. You cannot have a dozen priorities. In my experience with restructurings and turnarounds along with helping firms emerge from the pandemic with new agility, the golden number for the successful execution of key objectives is three.

The Power of Three

You can have three objectives or priorities each year, tops. These three objectives must be clearly articulated and supported by no more than three strategies with qualifying and quantifying measurements. Each of these three strategies is supported by three measurable tactics executed within specific timeframes.

Business growth objectives set in this manner with strategies and tactics executed accordingly are the equivalent of being on trial for your life. Objectives are achieved when smart strategies supported by tactics executed within tight timelines convert to achieving goals.

Dramatic as this sounds, setting objectives, determining strategies, and deciding on tactics boil down nailing three factors: 1) making tough decisions and sticking to them; 2) socializing the plan; and, 3) executing with precision on schedule.

This does not mean that success on all three objectives will happen within a one-year period, although that can happen.

In my experience, the achievement of major corporate objectives, such as those required for restructuring, turnarounds, and propulsion-igniting business advances may take up to three years. Advancement will be noticeable within the first year, obvious after the second year, and achieved in the third year. Once objectives are attained, they must be sustained with continuous reinforcement that cements them and ongoing maintenance to avoid backsliding.

Regardless of the timeframe, be it one year or three, the key to achieving major business growth objectives is to remain resolute.

Eclipsing Limitations

Pervasive sameness in the global legal market is due to a number of factors such as, traditional partnership structure, predisposition to valuing the practice of law over legal service business, and risk aversion. These factors result in remaining stuck within bounds of what should be rather than what can be. The difference is contextual: probability versus possibility.

This is when outside expert perspectives can enable mind-wide-open thinking and growth results that extend beyond capabilities, timeframes, politics and expectations.

Often, due to a desire of remaining employed, inside law firm talent ranging from partners to business professionals tends to stay within bounds of what will be acceptable by the firm’s stakeholders and executive management. This is why lackluster objectives, strategies, and tactics are prevalent and sameness is pervasive.

There can also be rigidity around financing standards and budgetary buckets rather than considering that money can be creatively allocated every year. I once sprinkled a truckload of new money for new hires, equipment, and resources across a proposed corporate budget. At the same time, a colleague slapped a note on a proposed departmental budget that stated, “There’s a chainsaw in here. Find it.” There was, they didn’t, both of our budgets were approved, and the business flourishes to this day.

This is the type of independent consultative expertise and experience that enables expanding beyond the limitations of how most law firms think, set and execute on strategy development that spurs exponential growth. It also enables laser-like focus on the process from start to finish, which is especially effective within a law firm environment that is often populated by people tasked with multiple projects and competing priorities. Not beholden to any one law firm and with no desire to ever be an employee, an entrusted independent expert is geared to support a law firm and its teams in a “high tide lifts all boats” endeavor.

This level of independence combined with deep legal market expertise enables heightening objectives and expanding strategies, both of which enable a law firm, practice, team or individual to remove boundaries and limited thinking. The result is exponential and often explosive growth. Having done this successfully many times, I can tell you from experience that ambitious and audacious “shoot for the moon” strategy development ensures clearing the treetops every single time.

Heather Suttie is widely acknowledged as one of the world’s leading authorities on legal market strategy and management of legal services firms.

For 25 years, she has advised leaders of premier law firms and legal service providers worldwide — Global to Solo | BigLaw to NewLaw — on innovative strategies pertaining to business, markets, management, and clients.

The result is accelerated performance achieved through a distinctive one of one legal market position and sustained competitive advantage leading to greater market share, revenue, and profits.

The effect is accomplishment of the prime objective — To Win.

Reach her at +1.416.964.9607 or heathersuttie.ca.

February, 2024 | Article

Why Going Paperless Can Be the Safer Option

Author Courtney Lerman

Navigating the complexities of data privacy and security poses an enduring challenge for law firms. While the routine storage of information in electronic formats has become commonplace, the threat of potential confidentiality breaches instills hesitation in embracing this option. Often overlooked by organizations with these concerns, however, are the greater risks to privacy, security and even day-to-day operations that can result from storing confidential data in paper format.

By storing information in paper format, your firm can be exposed to unnecessary risks due to:

• Lack of recovery: Paper files that are destroyed in a fire, flood, or other disaster are unrecoverable.
• Unrestricted Access: It is difficult to restrict physical access on a granular basis (i.e. per document basis). Individuals may be able to review any document in a particular file once they obtain access, for example.
• Filing Errors: As paper documents tend to be moved around several places before they are filed, they can easily be misfiled and/or permanently lost.
• Inaccessibility: Paper files cannot be accessed remotely, which can be problematic due to unforeseen circumstances (i.e. a pandemic). Furthermore, it can be costly and slow to retrieve records from long-term storage.

Safeguarding your firm’s and clients’ confidential data is paramount, and adopting electronic data storage not only offers enhanced security and privacy compared to traditional paper storage but also provides a more efficient approach to managing information. Data serves as a cornerstone for law firms, making it imperative to leverage the advantages inherent in electronic storage for heightened protection and streamlined information management.

1. Enhanced Loss Prevention:
• Electronic files can be backed-up, enabling you to recover or retrieve accidently deleted and misplaced files.
• If you choose to use Cloud storage to back-up, every time you make changes to a file saved in the Cloud, it can automatically sync and update across multiple devices.

2. Improved Security Measures:
• Storing information electronically gives you the ability to password-protect files or limit access on a per document basis, providing granular security capabilities.
• Not only can you encrypt files stored on Cloud severs, but most Cloud service providers also offer encryption of your data while it is in transit (as it moves between the user and the Cloud service).

3. Added Accountability with a Clear Audit Trail:
• Files saved electronically are time stamped and can provide you with details on who has accessed and/or made changes to a particular file. This level of accountability helps you uncover unauthorized system access and limits data tampering.
• With a clear audit trail, you can gain access to older versions of existing files as well.

4. Minimized Contact with Critical Information:
• Storing data electronically makes it easy for your employees to immediately upload and share vital information, helping to reduce privacy concerns and the potential for errors.

5. Increased Accessibility:
• Data stored electronically can be safely accessed with the right passwords, at anytime from any device with an Internet connection (alternatively, IP addresses can be whitelisted in order to limit which devices can access the information).
• Employees can also remotely access electronic files on an in-house server, given the appropriate permissions.

In conclusion, the intricate landscape of data privacy and security remains an ongoing challenge for law firms. Despite the prevalence of electronic storage solutions, the looming threat of potential breaches continues to cast a shadow of uncertainty over their adoption. This hesitancy, however, has consequences that extend beyond initial concerns, as organizations may inadvertently overlook the broader risks associated with maintaining confidential data in paper format.

Recognizing the importance of a comprehensive approach to data management is crucial for law firms to navigate these challenges successfully, ensuring not only the safeguarding of sensitive information but also the preservation of privacy, security, and seamless day-to-day operations. Embracing a forward-thinking stance towards electronic storage becomes imperative in fortifying the foundations of data integrity and resilience.

Courtney Lerman started at Octacom in 2019 joining the team as the Director, Client Service and Strategy. Courtney assists various clients (including law firms) throughout the scoping and implementation phases of scanning and digitization projects enabling clients to effectively manage, access and maintain critical documents. Throughout Courtney’s career, she has held several client service centric roles, including practicing employment law for several years at Blake, Cassels & Graydon LLP.

February, 2024 | Article

Inherent Advantages to Internal Reporting Systems

Author Andrew Lee

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. Each installment will feature a Q&A with Mitesh, offering new perspectives on financial data analytics and emphasizing the value and accelerated ROI achieved by leveraging an external consultancy partner. Stay tuned for monthly insights from the CFO's perspective!

Q (ProLytics): How can smaller to medium-sized firms progress towards aligning with larger entities in terms of profitability analysis, should a focus be placed on comprehensive reporting or information systems? Which is more important towards strategic advancement?

A (Mitesh): In response to your question about recommendations for a growing firm aspiring to align with larger entities in terms of profitability analysis, it’s essential to recognize the advantages of integrating both, comprehensive reporting and information systems.

For smaller to medium-sized firms, the initial focus often revolves around establishing regular reporting practices that serve immediate needs. However, to attain the level of sophistication seen in big law or serious mid-market law firms, embracing advanced tools for profitability analysis becomes paramount.

The key advantage in integrating an information system powered FP&A platform lies in providing timely, actionable information to users, particularly lawyers and department chairs who must make quick decisions. The ability to assess capacity, workloads, associate activity, and the nature of ongoing projects empowers decision-makers to navigate their responsibilities effectively.

TLOMA 6

Undoubtedly, the cost aspect is a consideration, especially for mid-size and small firms with limited resources. This is where external expertise, such as your team at ProLytics, proves invaluable. Partnering with experts becomes an extension of the law firm, enabling the implementation of sophisticated systems without the need for a full-time, in-house resource. It’s a strategic and cost-effective approach that facilitates efficient decision-making and supports the firm’s growth.

Seeking support from an external FP&A consultancy provides inherent advantages for internal reporting systems within legal finance. External consultants bring specialized knowledge tailored to legal finance practices, offering unique insights and best practices that may not be readily available internally. Their external perspective introduces fresh ideas and industry-specific expertise, enhancing the efficiency and effectiveness of internal reporting systems in the legal finance domain. Focused on aligning reporting processes with legal and financial standards, these consultants contribute to the development of robust and optimized internal reporting systems for legal finance operations.

Andrew Lee represents ProLytics Consulting Group. With over 15 years of experience in collaborating with leading Law Office Finance teams in Canada, USA, and overseas, ProLytics Consulting Group brings expertise across diverse infrastructure platforms and has partnered with industry innovators like Pat Carrano, CFO of Loopstra Nixon LLP and Finance SIG Leader at TLOMA (The Law Office Management Association). www.prolyticsgroup.com

Link to downloadable resource: https://prolyticsgroup.com/wp-content/uploads/2021/10/Helping-Law-Firms-Plan-with-Confidence.pdf

Webinar featuring Pat Carrano & ProLytics: https://prolyticsgroup.com/blog/streamlining-law-office-operations/

ProLytics Legal landing page: https://prolyticsgroup.com/solutions-for-legal-professional-services/

February, 2024 | Article

By-Law 9 in Legal Recordkeeping: Ensuring Regulatory Compliance

Author Keith Hill, Jr.

Proper recordkeeping is essential for lawyers in Ontario to maintain their professional obligations. By-Law 9 outlines the requirements for recordkeeping, including retention periods.

Here are some of the key recordkeeping obligations and their respective retention periods:

Trust Receipts & Disbursements Journal
A record of all receipts and disbursements of trust money for clients, including the date, method, amount, document identifier, and purpose.
Retention period: 10 years plus current.

Client Trust Ledger
A record of all money received and disbursed for each client’s trust account, including any unexpended balance.
Retention period: 10 years plus current.

Trust to Trust Transfer Journal
A record of all transfers of trust money between client trust ledger accounts, including the purpose of each transfer.
Retention period: 6 years plus current.

General Receipts & Disbursements Journal
A record of all non-trust money received and disbursed, including the date, method, amount, document identifier, and person.
Retention period: 6 years plus current.

Fees Book or Chronological File of Copies of Billing
A record of all fees charged and other billings to clients, including the date, client, and amount.
Retention period: 6 years plus current.

Monthly Trust Reconciliation and Comparison
A monthly comparison of the trust account balance and balance per accounting records, including reasons for any differences. Required by the 25th of each month.
Retention period: 10 years plus current.

Valuable Property Record
A record of any non-monetary property held in trust for clients, including a description, date received, value, client, and date given away.
Retention period: 10 years plus current.

Bank Statements or Passbooks, Cashed Cheques, Detailed Duplicate Deposit Slips
A record of all trust and general account transactions.
Retention period: 10 years plus current.

Electronic Trust Transfer Records
A record of signed electronic trust transfer requisitions and confirmations.
Retention period: 10 years plus current.

Cash Received
A record of all cash received, including the date, person, amount, client, file number, and signatures.
Retention period: 6 years plus current.

The stringent accounting principles and recordkeeping stipulations outlined in By-Law 9 serve as a deterrent to potential malfeasance. Its design is specifically geared towards safeguarding client trust and interests, establishing thorough regulations for the handling of client funds.

Compliance with By-Law 9's recordkeeping requirements is imperative for lawyers to fulfill their professional obligations. Licensees must securely maintain these records for the stipulated period to adhere to legal requirements, as failure to do so may lead to disciplinary actions. Crucially, the safeguarding of clients' records is paramount for preserving the accuracy of trust funds.

Keith Hill Jr. is the Principal at Bookkeeping Matters Inc (BMI). For over a decade, Bookkeeping Matters has been satisfying bookkeeping needs for lawyers throughout Ontario and other provinces. As a former Legal Accounting professor, Keith has also positioned BMI as a premier provider of online legal accounting training. Specializing in several practice management software, Keith and his team can be contacted at: info@bookkeepingmatters.ca / 1-800-893-2820 / www.BookkeepingMatters.ca

February, 2024 | Article

Strategic Issue Thinking Is In - Strategic Planning Is Out

Author Stephen Mabey CPA, CA

Some law firm prognosticators have been sounding the death knell for strategic planning. Their thinking is based upon the opinion that traditional strategic planning for law firms is dying or ineffective due to several reasons:

1. Rapid Changes - The legal landscape is evolving faster than ever due to technological advancements, regulatory shifts, and changing client demands. This pace of change means that long-term plans become obsolete before they can be fully implemented.

2. Emphasis on Agility - There is an increasingly high value given to the ability to pivot and adapt quickly. Traditional strategic planning can sometimes be rigid and slow to change.

3. Limiting Creativity and Innovation - Strategic planning is based on past data and experience, which can restrict firms from thinking outside of the box or innovating.

4. Illusion of Control - Strategies often give the illusion of having control over the future, which is unpredictable. This illusion can cause firms to overlook potential threats or opportunities.

5. One Size Doesn't Fit All - Traditional one-size-fits-all strategic plans may not work for every firm. Firms have unique needs, strengths, and weaknesses.

Instead, consultants suggest using iterative, flexible planning methods that entail continuous learning and adjustment. These approaches often involve setting shorter-term goals, constantly reviewing and revising plans, and adopting a more experimental mindset.

The recent demise of Minden Gross indicates that law firms must be forward-thinking and prepared for various future scenarios. This forward vision includes anticipating changes in the legal landscape, shifts in client demands, or broader societal changes that could affect their services.

Law firms can use strategic issue thinking ("SIT') to identify opportunities for growth or expansion, streamline their operations, improve their services, distinguish themselves from their competition, determine the skills and expertise they will need to acquire or develop, and plan career development paths for their lawyers and support staff.

A typical starting point for such an exercise is clearly defining a priority issue or topic as the session's focus.

The group should revisit, clarify, or reaffirm the firm's overall vision to ensure alignment with all strategies arising from the session. Historical thinking casts both statements in concrete. The current era of perpetual upheaval has resulted in a serious rethink of whether vision and mission should be static.

The vision statement - How or why we do it - outlines the values that drive the organization or how it accomplishes its goals; some are succinct, while others include an expanded description. But in all cases, it must possess an illuminating quality that allows firms to move quickly and precisely.

On the other hand, the mission statement - What we do - defines a company's purpose and measures its success. Ideally, it is precise and concise and communicates the organization's strengths, differentiators, and desired goals.

After identifying the topic and boundaries for any strategies arising from the session, firms can take the following steps:

• Focused SWOT analysis - addresses the strengths, weaknesses, opportunities, and threats related to the topic, not firmwide.
• Understanding the Market - discuss shifting client expectations, the impact of technology on the legal industry, and key competitors' strengths and weaknesses.
• Strategy Development - Based on the discussions, new strategies are crafted. Each proposed strategy should be:
º SMART- Specific, Measurable, Achievable, Relevant, and
º Time-bound - Specific time frames and deadlines set for completing the strategy
• Regular Reviewing and Refining - The firm may decide to review the agreed-upon strategies quarterly or half-yearly to check progress, adjust, and respond to any changes in the market conditions.

Conclusion

SIT sessions should be inclusive, holistic, candid, and strategic. They should engage all key stakeholders and should:

• Stick to the priority issue at hand.
• Focus on driving the firm toward its future vision and mission.
• Proposed strategies should be SMART.
• Incorporate a communication plan.

Firms have nothing to lose from trying strategic issue thinking. As Henry Mintzberg was quoted:

"Strategic planning is not strategic thinking. Indeed, strategic planning of ten spoils strategic thinking, causing managers to confuse real vision with the manipulation of numbers".

Stephen Mabey is a CPA, CA, and the Managing Director of Applied Strategies, Inc. His credentials include:

Fellow of the College of Law Practice Management (one of 19 Canadians – 276 Fellows);
Author of Leading and Managing a Sustainable Law Firm: Tactics and Strategies for a Rapidly Changing Profession and Key Performance Indicators An Introductory Guide (Amazon);
More than 25 years in a senior management role with Stewart McKelvey a 220 lawyer, six office Atlantic Canadian law firm;
Over 14 years providing advice and counsel to small to mid-size law firms on a broad range of issues;
A panelist and facilitator of the Managing Partner Information Exchange (“MPIE”) at the annual Managing Partner Forum Leadership Conference held in Atlanta Georgia each May;
A group mailing list that circulates articles, directly and indirectly, impacting law firms.

He has advised law firms on a wide range of law firm issues, including - strategic action planning, leadership, understudy (succession) planning, business development, capitalization of partnerships, partnership agreements, lawyer & staff engagement, marketing, key performance indicators, competitive intelligence, finance, mergers, practice transitioning, compensation, organizational structures, and partnership arrangements.

Stephen can be reached by email – smabey@appliedstrategies.ca or phone at 902.499.3895.

February, 2024 | Article

How to Hacker-Proof Your System in 2024

Author Colin Pearce

In recent years, cyber attackers have been targeting Canadian law firms more aggressively than ever. They’ve gone beyond their traditional activity of hacking and stealing data to doing financial damage with business email compromise (BEC) and ransomware. These incidents have been a wake-up call for many in the legal industry, emphasizing that no organization is immune to these threats.

Fortunately, there are measures that law firm managers and administrators can take to fortify their computer systems. This article takes a closer look at the top recommended solutions and how partnering with a security services provider can help protect your firm in the coming year.

1. Establishing Strong Passwords: Your First Line of Defense
Passwords are the gatekeepers of your digital domain. Ensure that all employees use complex passwords – a mix of letters, numbers, and symbols. Use a different password on each service you use. Consider using a reputable password manager to keep track of these passwords securely.

2. Multi-Factor Authentication (MFA): A Critical Layer of Security
MFA requires users to provide two or more verification factors to access a resource, drastically reducing the likelihood of unauthorized access. Implementing MFA to access your firm's critical systems can significantly enhance your security posture. MFA is the single most effective thing you can do to secure yourself.

3. Regular Software Updates: Keeping Your Defenses Up to Date
Cyber threats evolve rapidly, and so should your defenses. Regularly update all software, including your operating system, antivirus programs, and other critical applications. These updates often include security patches that address vulnerabilities hackers might exploit.

4. Employee Training: Empowering Your Team
One of the most common ways cyber attackers gain access is through 'phishing' – deceptive emails that trick recipients into revealing sensitive information. Conduct regular training sessions to educate your team on how to recognize and respond to such threats.

5. Regular Backups: Your Safety Net
Regularly back up your data to a secure location. In the event of a data breach or ransomware attack, having up-to-date backups can be the difference between a minor setback and a catastrophic loss. Find out how long it will take to get up and running again if you need to use your backups.

6. Restrict Access to Sensitive Information
Not every employee needs access to all data and systems. Implement 'least privilege' access policies, granting employees access only to the information necessary for their roles.

7. Engage in Regular Security Audits
Regular security audits can help identify potential vulnerabilities in your system. Consider hiring external cyber security experts to conduct these audits for an unbiased assessment.

8. Stay Informed About the Latest Cyber Threats
Cyber security is constantly evolving. Stay informed about the latest threats and best practices by subscribing to reputable security newsletters and attending relevant webinars and conferences.

9. Talk to your IT Provider
Your IT provider has access to many of your systems. If they are compromised, odds are you will be too. Ensure that your IT provider is following all these recommendations and more. Ask them about the security of stored passwords, when was the last time they tested your backups, and how often they are assessing their own security policies and practices.

Seeking Expert Help: Legal Tech Solutions Providers

While these steps can reduce your risk, improving cyber security often requires specialized expertise. This is where a legal tech solutions provider comes in. They can help you implement advanced security measures, provide ongoing support, and ensure that your firm's defenses evolve with changing threats.

Dedicated legal tech solutions providers understand the specific needs and challenges of law firms. They offer tailored services that include:

• Tailoring security measures to fit the requirements of your law firm.
• Providing round-the-clock surveillance of your systems to detect and respond to
threats promptly.
• Ensuring that your firm's data handling practices comply with industry standards and
regulations.
• Offering specialized training sessions designed for legal professionals.
• Helping you develop a robust plan to quickly recover from any cyber incidents.

Questions About Cybersecurity in 2024?

2024 may present new challenges, but it also provides new opportunities to safeguard your systems and your clients' trust. If you would like to learn more about cyber security for law firms, head to our website for short informational videos.

Colin is founder and CEO of Inderly - IT for Law Firms, serving clients across Ontario. Colin enjoys figuring out how to make business technology work best for each unique situation.

February, 2024 | Movers and Shakers

New Members
Liija Eskola HR Manager Kelly Santini LLP	Annie Kee Senior HR Manager Fasken
Katie Foley HR Manager Bennett Jones LLP	Shelley Ford Director of Finance Torkin Manes LLP
Ashley Pun Manager, Human Resources Bennett Jones LLP	Reanna Samaroo Office Manager Mathers McHenry & Co