Interview with Vanessa Ugatti: Charge what you’re worth
Hello, Vanessa – What do you do and why do you do it?
I help law firms and sole practitioners to take charge of their business and their clients, get paid what they are worth ethically and create a healthier life-work balance.
So many highly skilled, conscientious lawyers under-estimate, discount and over-service their clients and don’t know how to get out of this damaging habit which causes no end of challenges both financially and emotionally.
The reason I do this is because I had the problem myself really badly and it was painful. I have gone from utterly clueless and powerless to expert and confident when choosing, charging and managing my clients.
By tackling my own self-worth issues, I was able to bust through my blocks, enabling me to see my own value. The knowledge gained, combined with my natural talent for simple communication, innate empathy and high energy, enable me to assist others to do the same.
So it is more than just a business; it’s a vocation.
Why is great self-worth so important?
The answer to that question is quite simple. Because it has a significant impact on revenue, but that’s not all. The on-going effects of continued stress from these destructive behaviours may lead to health issues, both physical and mental as well as negatively impact on relationships and general quality of life.
It is always important and always will be. However right now and of course over the last few months since Covid began, the chances are that the problem of not charging properly will have intensified. The reason for this is because emotions have heightened including fear, which causes its own set of problems. The greater the fear, the more people will focus on price and therefore the more discounting and over-servicing will occur.
It is a downward spiral.
How much revenue is the typical firm you advise leaving on the table?
There isn’t actually a typical firm because of course it depends on the size of the firm and the number of lawyers who have this problem. Suffice it to say, we are not talking pennies. Significant amounts of revenue can be lost very easily and on an on-going basis.
Part of the problem is that firms have no real clue about how to solve the problem. They think they can just tell their lawyers to charge so and so and they will. It’s easy to do that, but if a person does not feel confident about charging whatever their headline rate is, they won’t. It’s that simple.
What are your top 3 tips for knowing your worth and implementing strategies?
- Think consciously about the value of everything you do for your clients.
- Have the right conversations with clients at the right time.
- Ask yourself what the piece of work means to the client, both from a financial and an emotional perspective.
Interesting! Where can we find out more?
MoJ has no appetite for legal regulation overhaul, for now
At the Westminster Policy Forum event held on 15 September, the Gazette reports that the Deputy director of UK legal services said that the MoJ does not currently have any plans to overhaul the Legal Services Act.
Since the publication of Professor Stephen Mayson’s landmark report into the regulation of legal services, there has been growing speculation that the 2007 Act would face some sort of reform. Reserved legal activities reform and a registration scheme for unregulated legal providers were both anticipated.
But is seems as if the government has enough on its plate at the moment.
At the same policy forum, there was some indication that the MoJ likes the idea of extending access to the Legal Ombudsman scheme to unregulated providers.
As for the more radical recommendations in Professor Mayson’s report, we can see these coming back up the agenda in the coming years.
Frozen asset list – impending deadline to check you aren’t holding money subject to sanctions
This begs the question: do you check the sanctions list when taking on new clients?
Those firms that use third party KYC tools almost certainly do this by default. But for those who rely on manual KYC procedures, do you factor the sanctions regime into your onboarding process?
If the answer is no, then you should definitely without a shadow of a doubt, go through the list and compare it with your client account ledgers.
Even if you are confident that you do not have any clients subject to sanctions, might it be sensible to at least check the list?
“But why would a person subject to sanctions use my little law firm? We aren’t exactly international specialists”. Well, dear fictional reader, you may have just answered your own question.
Reminder about Price Transparency
The SRA Price Transparency Rules have been with us for almost two years (how???). We thought it was a good opportunity for a reminder of the basics.
In our blog we set out which services are subject to the price information requirements (ahem, those in the picture above), but also how service and regulatory information is applicable to all firms.
Time to check your website?
New SRA Guidance – Taking money for your firm’s costs
The SRA has finally issued guidance aimed at clarifying how to apply the SRA Accounts Rules properly in a couple of key areas. We asked topic expert and Jonathon Bray consultant, Richard Lane, to consider if this new guidance brings clarity or confusion.
What is covered by the new guidance?
Primarily, the new guidance has been issued to clarify the status of money received on account of fees, for work not yet undertaken and disbursements not yet paid.
But hasn’t money for unpaid disbursements and payments on account of fees always been client money?
Well, yes….and no. Prior to the introduction of the new SRA Accounts Rules on 25 November 2019, it is true to say that money received for unpaid disbursements and payments on account of fees were client money and ought to have been retained on client bank account until the work had been undertaken, even if already billed, or disbursements had actually been paid. However, rule 2.1(d) of the new SRA Accounts Rules appeared to change this position but, prior to the launch of the new rules, it became apparent that this was not the SRA’s intention and/or interpretation of the rule!
What can we learn from the new guidance?
In short, it’s not necessarily enough to apply the new SRA Accounts Rules to the letter. The wider obligations on individual solicitors and firms to safeguard money and assets entrusted to them by clients is paramount and for the time being, at least, means that a strict interpretation of the rules as written may not achieve this aim.
Is there any good news?
Some, yes. The SRA have confirmed in this guidance that they are content that where a firm holds money on client account for disbursements and subsequently pays those disbursements from the firm’s business account, they will not be considered in breach of rule 4.3 if they transfer the money to cover the paid disbursements from the client bank account to the business account, without having first given a bill to the client.
Are there other areas where uncertainty over the application of the new SRA Accounts Rules exists?
Sadly, the answer is yes. For example, many firms will have a credit and debit card facility linked to their client account, even though they might just use this to receive the payment of a bill for their professional fees from the client. In previous versions of the rules there was a provision which allowed this practice. Under the new rules there is no longer an exception allowing money belonging solely to the firm to be paid into the client account.
How can we learn more about the new Accounts Rules?
Richard regularly presents a two-hour live webinar entitled, ‘A Practical Guide to the SRA Accounts Rules ’, this is being run next on Tuesday 20 October 2020.
Where can I find Richard’s full article on the new guidance?
The full article is published on his company’s website.
Spotted on LinkedIn – How often should you change your password?
Registered European Lawyers (REL) regime ends on 31 December 2020
In its latest Update, the SRA has confirmed what we already knew. At the end of the transition period under the Withdrawal Agreement, RELs will no longer exist. The silver lining is that all RELs will automatically become Registered Foreign Lawyers (RFLs) from 1 January 2021.
For many RELs, this will make little difference. As an RFL, they will still be able to practise in the UK, either as lawyers of their home jurisdiction or unreserved English legal work.
There are practical considerations, however:
- RFLs are not authorised to carry on reserved work on their own, so have to be supervised by an English lawyer
- RFLs can only own a regulated business with English lawyers
- RFLs are subject to the individual Code of Conduct in full
- RFLs cannot be a COLP, and so firms with an REL COLP currently will need to apply for a replacement before the end of the year (allowing at least 30 days for the authorisation). We have asked the SRA for further guidance on this point.
Question of the week
Can we transfer the proceeds of sale to our client’s creditors?
It is not uncommon for clients to ask their solicitor to use the proceeds of sale (or litigation windfall) to pay third parties unconnected with the case.
Our advice is always the same on this: don’t do it. You might think you are being helpful, and the client may be insistent, but you are putting yourself in jeopardy in doing so. Using the client account as a banking facility is an absolute no-no. Your client might be attempting to shield assets, or something more sinister.
Luckily, regulation gives you an easy out. Explain to the client that you are not permitted by the SRA to transfer money out of the client account without there being a clear underlying legal transaction. Paying creditors, school fees, “family members” and the like is going to get you into trouble.
If paying these third parties is so important, the client can just as easily arrange to make payments from their own account.
Read the SRA Warning Notice on using client accounts as a banking facility.
- Israr Mohammed Malik – fined £2,000 for a lack of independence in dealings with CMC that referred 95% of the firm’s work
- Cabeer Ahmed – struck off for misappropriating £100,000 of client money to pay off firm’s debts during its shut down
- Syed Wasif Ali – fined £60,000 and barred from making immigration judicial reviews due to abuse of the immigration process
- Keith Howell (paralegal) – banned through section 43 order for naming a client in a social media post and overcharging
- Sana Patel (paralegal) – banned through section 43 order for dishonestly misleading the court into reinstating a claim
- Taylor Bracewell (a firm) – fined £30k for charging its clients for the repayment of a loan to cover a new case management system. The loan repayment fee of £18 was buried in the cost of search packs.
- Zulfiqar Ali – struck off for facilitating ‘dubious’ property transactions and being caught advising on sham marriages by undercover reporters