By the Risk Management and Prosecutions Unit of the Attorneys Fidelity Fund

Have you ever sat back and asked yourself if you are an attorney or a service provider or both? You know that you have satisfied all requirements, and you are a practitioner and a professional, but is that all?

An attorney is responsible for representing his or her clients in a legal environment. This can take many forms, from defending them in a courtroom to simply advising them during legal transactions.

If you have decided to practise for your own account, you are running a business. You are, therefore, not just an attorney any longer, but, also a businessperson, a service provider. Business comes with its own challenges, and these you cannot ignore. Effectively, you are a professional running a business. As a professional, there are standards to uphold and codes by which you are required to abide. These codes cannot and should not be overlooked. You operate in a highly legislated environment, and compliance is of utmost importance. As a businessperson, you are operating in a competitive space and should remain competitive in order to survive. Do you sometimes feel that legislation and/or regulation of the profession hinders your ability to generate profits? Do you sometimes struggle to strike a balance between your profession and running a successful business? This article seeks to lessen the burden by showing you how you can remain professional while running a successful business.

Legislative environment

Attorneys in South Africa are currently legislated through the Attorneys Act 53 of 1979. The profession was, until 29 February 2016, regulated through the rules issued by the various provincial law societies. Effective from the 1 March 2016, the Uniform Rules (the rules) came into place to regulate the profession nationally, replacing the then rules of the various provincial law societies (see GenN2 GG39740/26-2-2016).

Section 78 of the Attorneys Act deals with trust accounts, while r 35 of Part V of the rules deals with accounting rules pertaining to trust accounts. Practitioners should always consider and comply with the requirements of the prescripts in doing their work.

Running a business

Everyone who ventures into business has the ultimate goal and/or objective to generate income, and maintain or improve the income levels. Running a business is a means to providing for oneself and dependants. One may be overly eager to reach particular income levels in a very short space of time, resulting in compromise of certain prescripts, and such actions are short-lived with dire consequences.

At the core of running a successful business is client service. Client service goes beyond just the core legal service provided, which you are an expert at, but includes the soft skills that go with the service provided. This article will mainly focus on the soft skills of running a business. Good client service helps you retain your clients and generate perpetuated income. It also helps with introduction of new clients by existing clients. As Chip Bell once said, ‘… loyal customers are a different breed. They don’t just come back, they don’t simply recommend you, they insist that their friends do business with you’ (Chip R Bell Customer Loyalty Guaranteed: Create, Lead, and Sustain Remarkable Customer Service (Adams Media 2007)).

We now look at some of the elements of client service as it applies to a practitioner’s environment.

Understanding client expectations

When a client goes to a practitioner for a legal service, the client already has preconceived expectations. Your first contact or meeting with the client is crucial. The impression created at that meeting has long lasting effects.

• It is important that as a practitioner you fully understand the instruction or the mandate from the client. You should document and reaffirm the instruction with the client to avoid any potential misunderstanding.
• It is also important to understand what service the client expects to receive from you. As part of understanding the client’s expectations, it is crucial that you explain your obligations in terms of the mandate and your client’s obligations. You should also explain the process to your client, the procedures involved, the possibilities, and the impact those possibilities may have on the service rendered, and any financial implications posed by those possibilities. Using the client’s explanation of the issue and your expertise for which the legal service is required, take the client through how you will go about executing the mandate, and how and when you may require the client’s involvement. Communicate potential timelines that may be involved, as well as what can possibly change those timelines.
• It is in your client’s interest to have an understanding of the financial impact of the service you will be rendering. Inform your client of your tariffs upfront, how and when you expect payment, what reference the client should use when making a payment, etcetera. This will set your engagement boundaries from the beginning, provide clarity to your client and minimise possibilities of chasing after your client for payment.
• Provide your client with your banking details to use when making a payment into your account. Should this be a trust account, the provincial law society should have knowledge of the account.
• After the meeting with your client, provide your client with a documented summary of your discussion and your understanding of your mandate. As part of that confirmation, state what the mandate entails and what it does not entail.

Client first

You must open a client file for each client. The firm must receipt all money paid in by the client, including money paid directly into the bank account or via Electronic Funds Transfer. The details that you must reflect on the record of receipt are the amount received, from whom and when it was received, for which matter and the purpose of the receipt. The firm must maintain an updated record of all monetary transactions at all times, for each client, and on aggregate.

Your client is an important stakeholder to you. It is important that as you provide the service to your client, you maintain close contact with the client on pertinent issues. Do not make a mistake that the client has mandated you, and therefore run alone leaving the client behind, not knowing what is happening. Keep your client informed of all achieved milestones and developments. When you need to consult with the client for a particular decision, make contact with the client and do not conclude on your client’s behalf, this consultation includes transferring money from one account to another where a client has more than one matter that you are handling.

Should the matter carry on for longer than initially anticipated, inform your client of that fact and provide reasons or explanations for the delays, but do not give excuses. As soon as it becomes clear that the matter will carry on, and the client has made a significant deposit into your trust account, and you deem it to be in the client’s interest to invest the client’s money, inform the client of that fact, and obtain the mandate from the client to invest his or her money. You need to document and explain the investment mandate to the client, including how and where you will invest the client’s money, the administration fee that you will charge on interest earned, and to whom the interest earned will be due.

It is also important that, in line with the rules, you also provide an accounting statement to your client on termination or completion of the mandate. The accounting statement should reflect:

• All money paid in by the client.
• All money paid out to or on behalf of the client.
• All money invested on behalf of the client (where money was invested).
• The interest rate on the investment.
• The actual amount of interest earned over the period of investment.
• The administration fee charged on the interest.
• The balance to be paid out to the client or owing by the client.

Multiple touch points and client feedback

In providing a service to a client, it is important that you do not target to excel in certain areas but in the whole value chain. When clients measure the service, or assess the service they received, they do not necessarily isolate areas but consider their whole encounter. There should, therefore, be no single touch points but multiple touch points.

How you measure quality in the service that you offer is important. While you may believe that you are doing the best for your clients, it is worth your while to check with your clients if they are happy with your service. Obtain feedback from your clients on their encounters with your firm, and encourage them to inform you of areas where your firm did well and where you fell short. The firm should not shelve the received feedback, but should use it to excel where it did well, and improve where it fell short. As Peter Drucker said: ‘“Quality” in a product or service is not what the supplier puts in. It is what the customer gets out … ’ (Peter F Drucker Innovation and Entrepreneurship (Harper Business 2006)).

As a practitioner, you are selling your time. However, you can only continue to sell that time provided someone wants to buy your time.

Conclusion

In conclusion, investing in client service can refuel the firm’s performance and improve the income generated. You should always nurture excellent client service because it is one of the most important catalysts to growing your business. Maintaining transparency while dealing with clients, although it can be administratively involved, goes a long way in selling the firm and gaining more clients.

We encourage readers to read this article together with:

• ‘Accounting to clients: How transparent are you?’ (2014 (Aug) DR 20);
• ‘How do you make your money?’ (2014 (Dec) DR 18); and
• ‘Are you in touch with reality…?’ (2016 (Aug) DR 16).

By the Risk Management and Prosecutions Unit of the Attorneys Fidelity Fund in Centurion.

This article was first published in De Rebus in 2017 (April) DR 14.