A firm will not succeed in setting up a financial services operation unless it has full support from every partner and fee earner in the practice.
Southport firm Carter Hodge's senior partner Stephen Holmes said that all partners needed to be committed to setting up of a financial services department. If not the chances were that even if the other criteria signalled a profitable department should be possible it may not be achieved.
He said the Law Society recommends employees are paid on a salaried basis. His firm employed its financial services executive on a basic salary but with a bonus system based on performance. It believed a guaranteed basic salary was important, particularly as many financial services' employees were paid by commission only. He added that quality staff could be obtained if they were guaranteed a basic salary of at least £20,000.
Firms would probably spend around £50,000 in the first year, including the executive's salary, the secretarial salary and sundries expenses such as office furniture and and lighting.
He said that one of the benefits of having a financial services department was that "unlike other departments which could be established the practice may already possess the raw material to provide instant return on outlay, such as the client bank".
However, he said that there were obvious difficulties with only one executive doing specialised work not carried out by anyone else in the firm, such as covering their job while they were on holiday or ill.
This happened in Holmes's firm. "We reverted to the Permitted Third Party route – utilising the services of a highly reputable and respected local Insurance Brokers," he said. But he added that it was not successful and "reinforced our opinion that it is the trust and confidence our clients have in our legal firm which is one of the keys to the success of the financial services department".
Holmes said that although there are some problems having a lone financial executive, if the department was organised properly it could still achieve outstanding results.
He said it was important for the financial services executive to win the confidence of the partners and fee earners. He or she much obtain a list of all new matters each week and discuss them with the fee earner/partner to explore whether there was a need to offer financial advice.