Bouncing back to sustainability and viability

Sustainability – “the ability to be maintained at a certain rate or level” or “avoidance of the depletion of natural resources in order to maintain an ecological balance.” Both definitions can apply to the legal and advice sector and its constituent organisations right now.

There is no doubt the emergency financial injections (and flexibility) by foundations and collaborations such as the Community Justice Fund have made a critical difference and kept organisations alive, people in jobs, services running and individuals in legal need supported.

More concerning is the continuing lack of viability of the legal aid model and grant funders who do not support full cost recovery (so organisations run projects and services at a loss). The lack of revenue from certain case types (and absence of work for practitioners like solicitors and barristers) has further longer term consequences. Building sustainability requires a coherent strategy, with key planks of that strategy shared or at least understood across the sector.

But what are we actually sustaining? And do we need to ‘build back better’ rather than patch a broken model?

“Resilience is about having the right foundational principles, having the right people, and making the best decisions you have with the information you have, and learning from every single thing good and especially bad.” @Tom_c_watson (Twitter)

Sustainable Funding – necessary but not sufficient?

NCVO’s Sustainable Funding Project developed the Sun tool to address financial sustainability. NCVO define “A financially sustainable organisation, small or big, is an organisation that can consistently support and deliver its mission, making the most of changing markets and funding environments.”

The tool also talks about moving through awareness, to making changes, to delivering and finally to excellence. In the following section we’ll adopt a slightly broader framework but use these themes. One point to bear in mind is that charities with a higher dependence on public and earned income (rather than just trusts and foundations) appear to have struggled more during Covid-19 than those relying on foundation support.

What are our challenges

The sustainability sub-group of the Legal and Advice Sector Roundtable identified four key challenges:

• the lack of secure long-term core funding (a welcome initiative from funders post lockdown was the pulling together of funding opportunities which makes it easier for organisations to apply and gives funders more visibility over the needs of the sector. However, funding remains predominantly short term and year on year.)
• the difficulty of recruiting and retaining staff. 
• making better use of technology – which has started to happen and is going to have to continue apace given the Covid-19 scenario
• morale in much of the sector is low. Many caseworkers want to deliver a great service to the clients but it is very stressful

These challenges map quite well across four key considerations for leaders and trustees to consider:

• Financial viability – can we appropriately and adequately fund what we’ve chosen to do and sustain this for the future?
• Doability – are we able to do the right things at the right time in line with our mission and strategic objectives?
• Clarity of Communication – what are our core key messages and who do we need to articulate them to and for what purpose?
• Usability – how do we deliver, and measure, value and outcomes in the interests of stakeholders and beneficiaries?

But as ever, we need to start with where we are and to know why we are there.

ARTICULATING THE CHALLENGES

Awareness, strategy and thinking ahead– where are we and why?

The current consequences and impact of the pandemic were not easy to foresee and the future consequences are even less predictable but now is the time to:

• clarify and confirm our vision/mission - what are we here for,
• dust down our SWOT (or as Juliet Corbett puts it, identify our accelerators (internal strengths and external opportunities) and sticking points (our internal weaknesses and external threats)),
• think about who will be affected (the stakeholders),
• identify a general approach,
• scan for consequences and risk assess and
• get on with it

Income - viability versus investment

Some organisations may just not be economically sustainable and we must recognise that. Some need targeted injections of cash to support the improvement which could make them sustainable despite running perpetually on the edge of survival, living month to month. Others might only need to refocus and reprioritise a few activities whilst some just need to keep building on their successes. Income diversity ensures that some funding streams might compensate for less effective streams but aiming for as close to full cost recovery as possible is key. It’s important to know which camp of organisation you fall into and remember that without money, wages don’t get paid and pretty soon you don’t have a service or an organisation. Stop doing so many projects or cases at a loss. The odd one is forgivable, making it a habit isn’t.

Leadership - Headspace, bandwidth and prioritisation

Are you running your organisation or is it running you? The former Cass Business School’s work on leadership development in the advice sector was loud and clear – leaders need to focus their time on planning and leading, doing what only leaders can do, not getting their hands quite so dirty on active operations. Boards which have invested in leadership capacity, leadership excellence (knowing the right thing to do and doing it right) and ensuring good use of leadership time have ended up being the organisations which have coped best with the pandemic.

Staffing, recruitment and retention - Who wants to work here?

With few exceptions, the legal and advice sector won’t make you rich but if you can pay your bills it can be tremendously rewarding. It does have a recruitment and retention issue but routes into the sector including Justice First Fellowships and University House’s work providing experience for trainee solicitors, and support mechanisms such as Young Legal Aid Lawyers are addressing some of the brain drain. Communities of practice and support are forming (sometimes sparked by social media) and membership organisations play a vital role. More effective sustainable organisations will also reduce pressure on individuals and reduce the exit from the profession.

Communication – why you matter and why it should be paid for

Whether you’re an advice agency, a lawyer or consultant, there will never be a shortage of people wanting things for free and offering free advice is important. But let’s be clear about the value of what we do (tangible and intangible), be clear in our messaging (this makes grant applications so much easier and successful, when we can articulate it clearly) and understand what value we add as part of the overall system. It’s not enough to ‘do good’ anymore. We need to be clear what that difference that good makes, where it complements other good work and that takes data and evidence.

Effectiveness – doing things better and doing better things

We’ve all embraced technology and digital change since lockdown and those who had invested in ‘modern’ systems and flexible cultures ahead of time managed more easily. Change is hard and effective change (and the better use of technology, tools, data and ways of working) takes time and money. You need clarity on what’s important and you need to implement/execute well. Dumping your server contents into Office 365 without planning or buying a cheap laptop isn’t the answer. You need to draw a thread through vision, scope of what you need and delivering it as well as possible and for that you need to know what tools and processes work and why.

Learning and data

We need to gather meaningful data and learning, not for its own sake, but so we know what works well (successes to build on) and what we need to improve (gaps, weaknesses and inefficiencies to deal with). If we can’t evidence the difference we make then how do we know how well we’re doing? If you reform based simply on intuition how well will it work out? Do we know what difference we make and how we can improve or are we stuck in a failing cycle and blindsided? This isn’t always easy but it is critically important and we need to start somewhere, baby steps if necessary and get help if we can’t do it alone.

EIGHT ACTION POINTS TO TAKE FORWARD

So what do we need to do differently to lead our organisations and sector on a path to sustainability?

a)    We need to focus on income positive activity – that means we generate more income for what we do than we spend on doing it (remember not for profit does not mean no surplus). We need to challenge funders, contract providers and the LAA to ensure that it is financially viable to deliver the service we deliver.

b)    We need to manage our cashflow and control costs carefully – lots of organisations appear viable but may have almost nothing in the bank. If you can’t pay your bills (or wages) you’re not going to carry on for long. Good financial management (and understanding the difference between ‘cash in bank’ and management accounts or balance sheets) is key. If we have very low unrestricted reserves - if we’re always struggling to pay the wages at the end of the month or make a positive balance at end of financial year then what do we need to do differently?

c)     We need to invest in improving our effectiveness - if it costs you £25 to deliver a basic service and it costs another organisation only £18, you need to ask why (your funders and clients will). At what point is it necessary or better to invest to improve effectiveness (or do something differently) rather than keep, literally, paying the higher price. Sometimes you’ll need a grant (and your time) to improve the cost and value of a service.

d)    We need to take a breath and look after our well-being so we can make the most of our ability - if it’s always impossibly stressful, what’s causing the stress? You can’t be effective running on empty with poor sleep. Take a break (however impossible it seems), take a day off (and evenings off). It’s not about how long you work, it’s about the difference you make in that time.

e)    We need to gather meaningful data and learning. What difference do we make? What are we basing our decisions on? What can we do to streamline the service and process for users (and staff)? We need simple dashboards of data so that we can see progress.

f)      Recording our dues - are we getting paid for everything we can possibly claim for or are we literally missing a trick? Were we clear how much work was involved when we signed the contract or asked for the grant? Do we know what’s billable or are we just lost in the actual work?   

g)    Making headspace and being disciplined - do we know what we need to do or are we just doing what we’ve always done? Making time for what’s important is a discipline. Failing to prepare is simply preparing to fail. Leaders need leadership time to do what’s right and what’s important in their role. Not taking the time is a bit like having an ongoing pain, avoiding the doctor and hoping it all goes away.

h)    Being clear about the outcomes - are we resolving people’s problems and needs or just patching up for someone else to deal with elsewhere? Where does our input and service dovetail with others in meeting the overall needs and what should be concentrate our focus on? Can we be more effective working together?

An overall proposition for each and every organisation

What if we applied six areas of focus to how we lead and manage our organisations:

• Mindset – what does sustainability look like for us and are we committing to it?
• Design – what do we want this to look like for the people we support (and us)?
• Investment – what different use of time and money will make us better and more effective in the short, medium and longer term?
• Learning – being clear what we need to learn, how we can gather data to inform us and to make use of it in our decisions
• Habits – being clear about boundaries and behaviours, disciplines and principles. Lead don’t just do.
• Using tools well – choosing the right tools and learning to use them well to improve effectiveness 

 Might this eventually lead us to:

• A system that rewards important and valuable work - for everyone
• Tools (and skills) to do the job as effectively and efficiently as possible
• Leadership to prepare for and manage the implications of change (sector and organisation)
• Focus on the bottom line financials, the user outcomes and the key detail of the job - you need all three
• Collaboration on learning and sharing – we don’t all need to do everything but we do need something to coordinate us together
• Effective campaigning and protest against inequities in the system so we can change what needs to change
• Sufficient finance to do this (because you can’t do it all without money)
• A coherent strategy for the provision of legal information, advice and support which recognises the value that different organisations in the sector bring and that the whole is greater than the sum of its parts. Funders, especially Government, need to buy into a shared vision and strategy that is sector led. 

It may or may not work but something clearly has to change. We can’t keep on keeping on. Above all, let’s stop doing unaffordable work and ensure leadership and management is in the hands of those with the skills and will to do what’s needed and that we prioritise what’s most important. If we’re encouraging those in legal need to seek expert advice early, shouldn’t we be doing the same ourselves?

Sustainability is possible. But it’s going to take work and effort - for individuals, within organisations and across systems and sectors.

Read the Sustainability sub-group's detailed paper here