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Cultural benchmark for law firms, perspectives on AI regulation, ForThe100, SRA reporting, and more

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LexSolutions launches Law Firm Maturity Index to set a cultural benchmark in the legal sector

As ESG demands and culture become more of a talking topic and a necessity for law firms to succeed with internal and external stakeholders, LexSolutions has this week announced the launch of its Law Firm Maturity Index (LFMI) in a bid to create a cultural benchmark for the legal sector.

It comes at a time when culture for law firms has never been more important, and as regulators, like the SRA, create new rules around toxic workplaces, reminding law firms of their duty to create positive working environments.

To gain a deeper perspective on the launch of the LMFI and its implications for law firm culture, Sophie from my team interviewed Manu Kanwar, founder of LexSolutions and Stuart Woollard, Managing Partner of Organizational Maturity Services LLP and co-founder and Council member at the Maturity Institute.

How do law firms currently report on ESG?

At present, law firms rely on their own self-reporting methods and may or may not have access to ESG data. This means that there is no reliable, independent measure that law firms can use for bench-marking performance.

Manu explains, “Up until now, law firms haven’t had a robust, independent way to be able to demonstrate their own reality. We’ve either been relying on law firm PR to let us know what it’s like, or we’ve been asking them to complete RFPs, which many people know either don’t give the full picture or otherwise are, as you might expect, naturally manicured and curated.”

What does the LFMI do?

The LFMI aims to measure how well law firms are run and the extent to which they meet social responsibilities, such as their commitment to ESG.

Collaborating with the Maturity Institute and using OMINDEX, a performance rating system, LMFI allows participants to assess their organisation’s maturity in leadership, values, well-being and environmental awareness. This process helps law firms identify areas for growth and development to achieve a healthier culture.

As Manu explains:

“The overall objective has been to launch a metric by which we can understand the reality within law firms, the lived experience of their purpose, values, culture, Diversity and Inclusion, ESG, innovation and so on. Our goal is for this to become the benchmark for the profession. We want the profession to own it.”

Stuart elaborates:

“From our perspective, we want this to become a powerful driver of improvement. We want others to feel that they are part of it. Fundamentally, our purpose is to make the best possible contribution we can to society at large.”

Launched just three days ago, the LMFI, is poised to make a significant impact on law firm culture and working practices.

Manu said:

“We’ve taken a three-pronged approach. Firstly, we have people from law firms filling in our survey. We’ll be able to pick up a rich picture across the profession. Secondly, we talk to General Counsel who want to use the index as a means to really understand their law firm panels. This includes highlighting where there might be gaps, why those gaps persist, and how General Counsel, law firms and stakeholders can work together to start closing those gaps. The third approach is with law firms themselves, who want to understand more deeply what their levels of maturity are.”

Stuart adds:

“If you can create momentum around maturity, you’re creating a race for the top. People will understand that maturity is something which is good for the business. This isn’t about naming and shaming, it’s about genuinely trying to shift a whole sector, because a healthy legal sector is going to be better for everybody.”

But it’s not just the legal sector that the LFMI wants to impact, by getting law firms and GCs on board the LFMI creators hope that it will have a wider effect..

Manu explains:

The bigger opportunity is for society at large, because all of these law firms are advising others and are involved in other sectors. They all have suppliers and partners that they’re working with. So the impact of helping to deliver that maturity will go much beyond the sector itself.”

Stuart said:

We want it to be a very powerful driver of improvement. Fundamentally, our purpose is to make the best possible contribution we can to society at large.”

How does it work in practice?

Law firms and GCs who want to adopt the LFMI can have results back in two weeks following an anonymous survey of the firm, they will then get a detailed report which breaks down the findings, followed by training to improve areas.

Currently, it’s at the discretion of law firms whether their findings are published, whilst there could be some fear for law firms who rank poorly, Manu and Stuart hope that it will one day be the norm.

Stuart says:

“If law firms accept they have problems but are willing to improve and measure that improvement to create healthier firms and healthier outcomes, I don’t think clients will punish firms and blacklist them for being more open. They will see that as a sign of integrity and authenticity. If we can help to drive that a little bit more, that would be a good place to get to.”

Manu adds:

“Law firms can say, ‘this is our overall score. This is what we found. This is where we identified gaps, and this is what we’re doing about it.’ And that is really important.”

Will the LFMI become the new benchmark for the sector?

The legal sector’s time is ticking on culture, the way that law firms approach ESG and how they treat their people, is something that’s fast becoming much more than a box ticking exercise. For recruitment, financial success, and ultimately the future of a law firm, those in the legal sector should be considering whether they want to board the boat of change, or simply wait and see if they will get left behind?

Balancing safety and innovation: perspectives from business leaders on AI regulation

With the rapid growth of Artificial Intelligence (AI), the discussion of how to regulate this advanced technology is becoming increasingly relevant. While Chancellor Jeremy Hunt has reportedly urged ministers to accelerate the deployment of AI in the private and public sectors to enhance productivity, tech bosses are urging officials to ensure that safety concerns are balanced with a pro-innovation approach to regulation.

Though the advantages of AI are clear, issues around clear guidance and safety protocols are causing tech bosses to call for a measured approach. They believe that regulating the technology will lead to its safe and successful integration into the industry.

Without proper guidance and safety measures, the risks of AI could outweigh its benefits, making it essential to have structure in place. In this scenario, the primary role of officials is to provide clear guidance on the risks that AI poses and how to use it safely, while also supporting its continued innovation and adoption.

As the industry continues to tackle the challenges surrounding the regulation of AI, business leaders and technology innovators are looking to the government to provide guidance in striking the right balance between safety and productivity. Chris Downie, co-founder of Pasabi – a platform that specialises in fraud detection – believes that the Government must help the industry find this balance. Similarly, Zahra Bahrololoumi, UK and Ireland chief of Salesforce, emphasises that trust and responsibility must be key factors in AI adoption. Both business leaders seek to achieve this balance while promoting innovation in AI. Asam Malik, head of the technology and digital practice at Mazars, highlights the importance of reasonable legislation when pushing AI forward to mitigate unnecessary risks.

Responsible AI development requires collaboration between governments, industry leaders, and experts in various fields. By working together, they can create a framework that nurtures innovation while protecting society from potential harm caused by unchecked AI advancements. These guiding principles should be focused on promoting trust and responsibility to maximise the potential of AI in the modern world.

I spotted some worrying demonstrations of bias within AI this week with a simple test that was run to show the percentage of images shown that were male when asking for people of varying careers.

AI is here to stay of course and many lawyers will want it to be safe before it can be adopted. My gut tells me that it’s worth experimenting with it at the moment, learning how to create great prompts and see what’s available so that when the time comes to be able to use it more for the day job, the skills will already be in place.

Heather Murray has gone all in on AI – and is worth a follow if you’d like to see what’s possible from someone who is in our sector.

Prioritising student welfare with a statutory duty of care for universities

Over the past weeks and months, the TBD team and I have been actively supporting ForThe100’s efforts to introduce a Statutory Duty of Care. We’ve dedicated a lot of time to this cause, and yesterday, the latest sign that all our hard work has paid off.

Tim Farron MP introduced a private member’s Bill to the House on 21 June, which is scheduled a second reading in November of this year.

The proposed Bill seeks to establish a legal obligation for universities to take reasonable steps to prevent harm to their students, particularly in areas such as mental health and wellbeing. If passed, the bill would represent a significant shift in the way universities approach their responsibilities towards students, and ensure that they are adequately equipped to address issues such as anxiety, depression, and other mental health issues.

Officially, between the 2017 and 2020 academic years, 319 students, 202 of whom were male and 117 were female, lost their lives to suicide. It is a staggering number that highlights the importance of supporting mental health in universities.

That’s why we fully support the introduction of a statutory duty of care for university students. Let’s hope this Bill is one step closer to addressing the issues and improving the well-being of students during their time at university.

Oh and thanks to Farrer & Co’s Alice Kendle who wrote up (part of) Parliament’s recent debate on this topic. Time for an update in light of the Farron proposed Bill…

In other news

EU AI regulations set to influence UK business landscape

UK businesses will need to adhere to new EU standards on AI if they plan to do business in the bloc, according to lawyers. The call comes shortly after the European Parliament adopted the Artificial Intelligence Act, which is set to establish new requirements and standards for the lawful and ethical use of AI technology across Europe.

The Act is expected to bring significant change, particularly for businesses utilising high-risk AI systems such as biometric identification and generative programs like Chat GPT. UK firms operating in the EU will need to consider the changes and adapt their AI approaches to meet the new requirements.

The EU’s risk management approach is a clear contrast to the UK’s pro-innovation framework. The new stance on regulating AI is being widely discussed, with lawyers warning UK firms that their access to EU markets will depend on meeting its standards. Tamara Quinn, a member of Osborne Clarke’s international AI team, suggests that the EU standards might become the “compliance benchmark” for UK-based developers. Angus Miln, a partner at Taylor Wessing, anticipates that the regulation will have a significant impact on the UK business landscape as companies balance compliance with domestic regimes and the stricter EU regulations applicable to their European operations. Meanwhile, UK Opposition Leader Keir Starmer has expressed plans to implement an “overarching” and “stronger” AI regulatory framework under a Labour government.

AI is becoming an increasingly crucial aspect of international trade and commercial transactions, so it is essential for UK businesses to prepare for changes and align their AI practices with EU regulatory standards to remain competitive in the bloc. As with any regulatory approach, there is always a need to balance safety with innovation and progress. In this regard, it is important to have effective collaboration and discussion between industry, regulators, and policymakers.

The EU’s recent adoption of the AI Act is a gamechanger for the AI industry, but it’s important not to lose sight of the critical roles of creativity and innovation in the field. The trick here is to create a balanced regulatory environment that supports the industry while emphasising safety. This won’t be easy, but it’s necessary to help businesses navigate the new changes and think creatively while staying within a regulated framework. As businesses work to navigate the changes, there is sure to be an increasing demand for legal insight and guidance in this field and on related IP rights.

The SRA’s mandatory diversity reporting in the legal sector

The legal sector has come under criticism for its lack of diversity, and the Solicitors Regulation Authority (SRA) has taken an active approach to tackle this. It is mandatory for all firms under regulation, irrespective of their size, to gather and disclose data regarding the diversity composition of their employees every two years. The timeframe in which this needs to be done this year is from 26 June until 23 July 2023

By participating in the survey, law firms can showcase their commitment to promoting diversity and work together towards a more inclusive legal industry for all. Additionally, the survey results will provide valuable insights and data on the current state of diversity within the legal profession, which can inform strategies for improving diversity and inclusion efforts.

Data is collected via a downloadable questionnaire, which needs to be completed by all employees. Or, TBD Marketing can do it for you, anonymously via a survey. We make the process fast and easy. Drop me or Jemma a line if you’d like to join the other firms outsourcing this to us.

25,000 solicitors fail to pay £20 fee for annual roll-keeping exercise

The SRA has recently brought to light a startling fact – over 25,000 solicitors without practicing certificates have failed to make payment of the £20 fee required to stay on the roll. This fee is charged to finance the annual roll-keeping exercise, which has been reintroduced this year after an eight-year hiatus to comply with data protection legislation.

According to chief executive Paul Philip, the fee not only covers the cost of running the roll exercise but also the cost of software development, and is not expected to break even for at least five or six years.

The reason why over 25,000 solicitors without practicing certificates have failed to pay to stay on the roll is a subject of debate. However, the news has sparked discussion and controversy around the issue. There is some belief that some solicitors may object to paying the fee as they do not have a practicing certificate, and they do not see the justification for this payment.

Regardless of the reason, the delay in making payment could result in a significant administrative problem for the SRA as it seeks to keep the roll updated and compliant. It also raises concern for the smooth running of future roll-keeping exercises, and more effective collection measures may need to be put in place to avoid similar situations down the line.

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