“Don’t compromise yourself – you’re all you have.” – John Grisham, The Rainmaker.
Nineteen years ago John Grisham wrote his sixth novel, The Rainmaker. It’s a story about a young lawyer (not unfamiliar in John Grisham’s stories) who after a shaky start finds himself as a trial lawyer in a big case. Lots of corruption, and a good pacey story. Quite different from the accountant I mention below.
I hope you enjoy today’s update for accountants and lawyers. But first, let me tell you about a story in Accountingtoday.Com. Dodgy accountants have been featured in the news before. But this story from Michael Cohn, Editor-In-Chief, at Accountingtoday.com takes it to a new level.
A Florida accountant has been arrested and accused of imprisoning three prostitutes in his home, raping the women, acting as a pimp and providing them with drugs. Timothy Deegan, 53, the owner of Deegan Professional Tax Service in Gainesville, Fla., was arrested last Friday on human trafficking charges, according to the Gainesville Sun. He allegedly videotaped sex acts with the women, which he then put online. Deegan also allegedly hired out the women to act as prostitutes for him in local hotels and paid them with cocaine. He monitored the women with the GPS on their phones and surveillance cameras he placed around his home in an upper middle-class suburban neighborhood in Gainesville.
If you want to read more it’s here.
Marketing and Practice Management Issues
5 tips to help craft employee benefits packages that scare the competition
An article in CIPFA says that employees need to be motivated and feel engaged in their work. If staff resign without good reason, it’s time to take a look at your employee benefits package and tailor an offer that helps hang on to them. Retention, engagement and motivation are the watchwords, writes Gill Kelly. Here are five tips to help you craft an employee benefits package that scares the competition.
- Design an attractive package: Easy to say, but true. Most people are visual creatures, so take a good look at your employee benefits package and ask: is it attractive? Does it appeal to you? From the outside, looking in, what do people see? Rather than applying a one-size-fits-all model, structure packages to suit your target audiences.
- Culture emanates from ‘the top’: The culture of an organisation is an essential component in employee benefits packages. Get it wrong, and people will leave or you will struggle to recruit the right candidates; get it right, and it will act as a magnet for the best. Fruitful cultures are those formed by a leadership able to effectively communicate and unite employees in a common purpose. Other important criteria for an attractive organisational culture include: provision of training opportunities, investment in time, fairness, appreciation for a job well done, recognising that not everyone is the same and making the most of individuals skills.
- Make your identity visible: Adding clarity to your organisation’s identity will improve its clout with recruits. Identity should evolve from a sense of pride in being part of the organisation or company. When recruiting, aim to take on likeminded people. Organisations that treat individuals with respect, while embracing the ‘We, not I’ approach, do well.
- Diversity: Senior managers who actively encourage workplace diversity add value to the employee benefits package by creating a culture of inclusiveness. Encouraging diversity of skills and people, as well as fostering acceptance and respect, appeals to many employees. This is because diversification creates a feeling of being valued. Being valued is often prized above financial incentives by employees. Diversity delivers numerous business benefits, with variation shaping change and movement within an organisation.
- Nurture a spirit of-collaboration: It’s very easy to come into the office each day and adopt a ‘silo’ mentality, but this does not benefit the employee or organisation. Businesses and organisations that are gaining market share frequently are those that cultivate a spirit of collaboration in the office. Encourage and enable connections, both within and outside the organisation. Senior managers need to encourage a feeling that you can be stronger working together rather than apart. Collaborative organisations have a lot to offer prospective employees, adding a perceived value to their benefits package.
Read the full article for more tips, here.
Five untapped opportunities to grow your earnings
In Accountants World, there’s an offer tied in with the statement that most accounting practices don’t see any opportunities for growth today: More and more taxpayers are using “do-it-yourself” tax software to do their tax returns, so that market is shrinking, and client accounting has become a low-margin commodity service. So how can you increase your earnings?
Believe it or not, the future for accounting practices is actually very bright. In a free white paper, “Where Are the Growth Opportunities for Accounting Practices?”, you’ll learn five exciting growth opportunities created by the cloud and other new developments. These trends have the potential to add billions of dollars in revenue to accounting practices.
The reality is there is no lack of opportunities for proactive accountants. Learn how to start tapping your practice’s true potential today by downloading this free whitepaper. Registration is required.
Read more here.
Temporary consumer credit regime to be extended to 2015
Nick Hilborne in Legal Futures reports that the Solicitors Regulation Authority (SRA) and Financial Conduct Authority have agreed that transitional arrangements for firms wanting to carry out consumer credit activities will be extended by a further six months, from 30 September 2014 to 1 April 2015.
The group licence, held by the Law Society and managed by the SRA, under which law firms carried out consumer credit activities ended on 1 April this year, when the FCA took over responsibility for this from the Office of Fair Trading. The activities involved are wide-ranging and include debt collection, limited advice on financial services and, in some cases, allowing clients to pay fees could have serious consequences.
Read more here.
Retail guru fashions ABS move into the law
John Hydein Law Society Gazette reports about an ambitious legal firm that negotiates large-scale outsourcing contracts has snapped up a top retail guru to help expand the business. Radiant Law, which has offices in London and South Africa, has installed former Mothercare managing director Greg Tufnell as minority shareholder and non-executive chairman.
Tufnell’s arrival was made possible after the firm secured an alternative business structure licence from the Solicitors Regulation Authority last week. He is the latest high-profile non-lawyer to be attracted to legal services, following entrepreneur James Caan, an investor in Knights Solicitors, and Betfair founder Andrew ‘Bert’ Black, who has backed Leeds firm Brilliant Law.
Read more here.
Going hostile: The role of the CFO in a takeover
Bracing for a takeover attempt requires the FD to focus on value, with plenty of risk management thrown in for good measure, writes Graham Jarvis in Financial Director. US pharmaceutical giant Pfizer’s recent attempt to take over another major player in the industry, AstraZeneca, shows how easy it is for a deal to fail. Having spent a month out in the open after making public its desire to buy the British drugmaker, Pfizer was unable to clear enough hurdles to push the deal through. Concern that the transaction was merely a tax mitigation exercise certainly didn’t help matters, while AstraZeneca’s board was stubborn in its call for a higher price to be set – one that would incorporate its future pipeline of medicine.
Robert Beveridge, a former CFO and non-executive director, says that the saga has created a lot of emotion, some of it negative. In spite of this, he expects there will be some re-engagement of communication with AstraZeneca’s board “in the future, at some point”. He believes that the 57% premium of the final offer was a high price and says it was brave of AstraZeneca to decline it. Nevertheless, there has to be some mutual benefit and understanding about how the transaction would add value to both companies.
Read the full story here.
The Cloud may disrupt business practices in same way as advent of computing, says EIU
In OUT-LAW News, legal news and guidance from Pinsent Masons, it suggests that businesses should look beyond the cost benefits that can be derived from using cloud services to assess the “real significance” the technology has on their organisation, the Economist Intelligence Unit (EIU) has said.
In its new report into the impact of the cloud, the EIU said that it had been unsurprising to see “cost flexibility” as the “prime driver for cloud adoption” by businesses given the economic challenges that have presented themselves in recent years. However, cloud computing can have a much greater impact on businesses than on just cost, it said.
The EIU said that the cloud has delivered “a revolution in the way information is stored and shared” and that it “could prove as disruptive to business practices as the advent of computing itself”.
Read more here.
Unsecured networks being used to host cyberattacks on other organisations
Cyber attackers are exploiting the way the internet has been designed to launch attacks on businesses, an IT security expert has warned (in OUT-LAW News, legal news and guidance from Pinsent Masons). Corero Network Security chief executive Ashley Stephenson told Out-Law.com that hackers are undertaking ‘NTP amplification attacks’ on businesses and that companies need to be aware that their servers may be being used to carry out attacks.
NTP amplification attacks exploit a vulnerability in how the global time standard for the internet operates. The ‘network time protocol’ (NTP) helps to “synchronise the clocks of computers over a network”. However, a vulnerability in how the protocol works allows hackers to send requests to unsecured NTP servers for details of what the recent IP addresses that have connected to those servers are. Hackers can use a spoof address when sending the request meaning that the response received from the NTP servers, which is often much greater in size than the request, can be directed at victims’ addresses. Replicated, the sheer volume of traffic sent from NTP request responses can bring down websites and other systems operated by others.
Read more here.
Slater & Gordon chooses £1.3m-a-year Manchester hub
John Hyde writing in Law Society Gazette says listed Australian law firm Slater & Gordon has announced it will open its new flagship Manchester office in early 2015. The premises in Mosley Street will be the firm’s largest office anywhere in the world, as well as the largest office of any legal firm in Manchester.
Read more here.
Technical Stuff
FRC scraps investigation into PwC’s Berkeley Group audit
Richard Crump wrote in AccountancyAGE to say that the UK accountancy watchdog has scrapped its investigation into PwC’s work as auditor of Berkeley Group Holdings. PwC’s independence was scrutinised by the FRC during the period that it conducted the audit of house building company Berkeley Group Holdings for the year ended 30 April 2012 – after a former PwC partner joined Berkeley’s board.
The FRC said the investigation, which Accountancy Age understands related to the appointment of PwC’s former UK vice-chairman Glyn Barker as a non-executive director on 3 January 2012, has now been closed and no further action will be taken. Accountancy Age understands the investigation was into the independent feedback role that Barker held when at PwC and whether Barker was in the “chain of command” by receiving feedback from Berkeley.
Read more here.
British Printing Industries Federation awarded ABS license
Nick Hilborne reports in Legal Futures that the British Printing Industries Federation, a trade association representing the UK’s print and packaging industry, has been awarded an alternative business structure (ABS) licence.
The license is for BPIF Legal, the trade association’s legal department. Anne Copley, the COLP, is currently head of legal, and advises members at employment tribunals, as well as training members and staff in employment law.
Read more here.
Direct access chambers recruits its first QC
Nick Hilborne reports in Legal Futures that the pioneering direct access chambers in Cheltenham has attracted its first QC, who has urged fellow criminal silks to follow his lead in preparing for a growth in privately paying clients.
Daniel Janner QC has acted in a string of high-profile murder trials as well as in fraud, regulatory and disciplinary cases. He is among the QCs refusing to accept very high-cost cases (VHCCs) at the greatly reduced legal aid rates.
Read more here.
BSB bids to improve barristers’ reporting of certain diversity data – from abysmal to awful
Nick Hilborne reports in Legal Futures that the Bar Standards Board has set itself a minimum target of 30% for diversity data collection from barristers on sexuality, religion and disability.
It is also planning more work on the under-representation of women at the bar, and reports of harassment and discrimination.
Read more here.
There’s no evidence incentives encourage fraud – Society
In the Law Society Gazette it says The Law Society has defended the practice of offering up-front incentives such as iPads to personal injury claimants, saying there is no evidence that it encourages fraud.
Responding to justice secretary Chris Grayling’s announcement of measures to crack down on bogus claims, the Society’s chief executive Desmond Hudson said: ‘There is no evidence to support suggestions that anyone would launch a spurious legal claim or embark on litigation just because they were being offered a free iPad just as it is a myth that we live in a compensation culture.’
Read more here.
IASB provides disclosure initiative update
Deloitte’s IAS Plus reports that the IASB has issued an update highlighting recent discussions of disclosure initiative projects. The objective of the disclosure initiative is to discover areas where disclosures can be improve and simplify within existing disclosure requirements.
Read more here.
IASB proposes amendments regarding the application of the investment entities exemption
Deloitte’s IAS Plus reports that the International Accounting Standards Board (IASB) has published an Exposure Draft (ED) of proposed amendments to IFRS 10 ‘Consolidated Financial Statements’ and IAS 28 ‘Investments in Associates and Joint Ventures’. The proposed amendments aim at addressing issues that have arisen in relation to the exemption from consolidation for investment entities. Comments are requested by 15 September 2014.
Read more here.
FRC plans to consult on FRSSE 2015 for small business
AccountancyLIVE reports that it is understood that the Financial Reporting Council (FRC) will now issue an initial consultation on FRSSE 2015 by the end of June, rather than the expected exposure draft.
However, any proposals may well conflict with the new EU Accounting Directive which the Department for Business, Innovation & Skills (BIS) is currently drafting. The new EU-driven accounting rules will be introduced as part of the Companies Act in due course and are set to come into effect by 2016.
Read more here.
The pension changes
The pension changes: What do they mean for you? With a host of changes to the pensions scene announced by the UK Government in the past few months, this report examines what the policy changes mean and what new options are open for retirement savers.
You can download the free report from here. Registration is required.
45 competency areas businesses value in Finance Professionals: New research
Businesses around the world seek enhanced competencies among their finance professionals to better address the challenges and opportunities of today’s complex business environment. Based on extensive global research among employers and other stakeholders, the CIMA and the AICPA, two of the world’s largest accounting organisations, have identified a competency framework with 45 areas where employers such as IBM and Unilever expect proficiency.
The framework is comprised of four knowledge areas — technical, business, people and leadership — with competencies defined at four levels: foundational, intermediate, advanced and expert. It was developed through research that included a survey of nearly 3,400 members, students and educators; roundtable discussions in 13 countries; and in-person interviews with representatives from 67 organisations, including IBM, Unilever, Microsoft and Shell.
Read more here.
Sir Nigel Knowles: The end of the legal market as we know it is nigh
In The Lawyer, Article by Sir Nigel Knowles, global co-chief executive, DLA Piper: He says:
Prosperity is all around, but that will only lay bare fundamental problems in a sector accelerating towards its judgement day. The wave of positive economic data that ushered in the New Year has become positively tidal as momentum and growth, now driven by increased business investment levels as well as consumption, has buoyed markets and even had commentators whispering that Bank of England governor Mark Carney will be forced to raise interest rates earlier than advertised. This now seems inevitable, even if the hike is unlikely until next year. The outlook is bright for corporate deal activity too, with IPOs continuing their upward trajectory and M&A volumes picking up significantly.
But this seemingly unstoppable march towards the sunlit uplands of sustainable growth is not reflected in the legal services market. Indeed, law firms are expected to experience a very different year to that enjoyed in the stock markets.
Change is coming soon
Last year was supposed to be one of major upheaval for the legal services industry. This did not happen in any meaningful way, but do not be fooled – it has merely been given a stay of execution.
Read Sir Nigel’s full article here.
Urgent costs reviews if hourly rates are cut
Eduardo Reyes writes in Law Society Gazette to say that cuts to paralegals’ guideline hourly rates (GHR), reported by the Gazette last week, will prompt an urgent review of law firms’ approach to costs and staffing, leading practitioners predicted this week.
John Bramhall president of the 1,500-member London Solicitors Litigation Association, told the Gazette that if the rates involve substantial reductions for paralegals, ‘the current drive to hire paralegals in place of more qualified staff may be brought to a swift halt’.
GHRs apply to summary judgment for the purposes of recovery of costs from the losing party in civil litigation. The rates are also used much more widely because of their acceptance by the courts.
‘Many use the GHR as a failsafe,’ Sue Nash, chair of the Association of Costs Lawyers, said. A change in the rates ‘should encourage firms to look more closely at expense rates’.
Read more here.
Legal aid guidance unlawful, High Court rules
Catherine Baksi writes in Law Society Gazette to say that elements of the Lord Chancellor’s guidance for granting legal aid in exceptional circumstances for immigration cases are ‘unlawful’, the High Court has ruled.
Giving judgment in six linked cases – Gudanaviciene & Others v director of legal aid casework and the lord chancellor [2014] EWHC 1840 (Admin) – Mr Justice Collins said the guidance issued by the Lord Chancellor is in ‘certain respects unlawful’ in that it is ‘too restrictive’ and ‘not in accordance with the law’.
Read more here.
Graham pre-pack report an excellent contribution to debate – R3
Giles Frampton, president of insolvency trade body R3, has responded to Teresa Graham’s wide-ranging report on ‘pre-pack’ administrations.
You can read what he said here. And there’s further commentary here.
“The world is full of obvious things which nobody by any chance ever observes.” – Arthur Conan Doyle, The Hound of the Baskervilles
He has written over 700 business publications (see Glossaries at https://onesmartplace.com/resources/glossaries/) and is editor of Better Business Focus (see https://onesmartplace.com/resources/better-business-focus-magazine). His Blog, on a wide range of subjects can be found at: https://onesmartplace.com/blog/
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