The importance of a well-designed new business acceptance process at professional services firms

Can your firm’s new business acceptance process pass a risk “health check”?

Your firm may already have a new business intake software in place, but does that technology actually lead to an efficient and compliant new business acceptance process?

In the ever-changing and dynamic business landscape, a robust new business acceptance process serves as the heart of a professional services firm’s operations. Over the years, I’ve helped a variety of firms conduct risk “health checks” of their new business onboarding solutions. I’ve found that some firms, even those with automated business process management software, lack a well-designed, effective, and efficient workflow process for evaluating potential new clients and quickly deciding on whether or not their firm should be involved.

Moreover, firms sometimes mistakenly believe that software alone, without a reliable process and effective policies supporting it, will lead to sound new business acceptance decisions. In fact, though, a sound process is necessary to make the most of a software tool.

Here are the critical questions to consider when evaluating a new business acceptance process.

Does your firm have a dedicated team responsible for reviewing and approving new clients, matters, and potential business opportunities?

To optimize your new business acceptance process, your firm should consider establishing a department focused on this task. However, if your firm doesn’t have the requisite budget for a specialized department to perform this function, it can still identify key professionals who could oversee your business acceptance review process.

Does your process go beyond conflict review?

Determining whether a new client or related parties in the matter present a potential conflict of interest is only one part of business acceptance review. In fact, you may not even need to address this question if you first determine that a new opportunity is not financially worthwhile. For example, a firm may not want to engage in work that will pay less than $10,000. A firm also wouldn’t consider a client or engagement that is in an industry or area it’s not interested in working in. Thus, your new business review process should include first determining whether an opportunity is worth your firm’s attention.

Other potentially overlooked aspects of a business acceptance process include obtaining signed engagement letters, negotiating outside counsel guidelines, recording conflict waivers, and securing advanced payment retainers from clients. A more comprehensive approach ensures that all aspects of the firm’s requirements are met before a new client and/or matter are accepted.

Is your new business acceptance process well designed?

Transitioning to a business process management software, such as Intapp Intake, makes it easier to establish a consistent, streamlined workflow. Regardless of the technological tools you choose for your process, the following six steps are crucial.

1. Fee earners or their support professionals submit new or existing client matter details to the designated department (let’s call it the “New Business Acceptance Department”) or professionals with responsibility to perform initial client matter review, risk assessment, and client worthiness research.
2. The New Business Acceptance Department, or designated professionals, vet the information, consider whether the business is worthwhile and aligns with the firm’s strategic goals, conduct conflict checking and analysis, triage the results, and escalate any potential hits for further analysis and/or conflicts clearance.
3. Those reviewing escalated conflicts search results obtain necessary clearance. As part of the resolution process, they may need to seek conflict waivers documentation and involve the Office of General Counsel. The output of the conflict checking and clearance, and any signed waiver documentation, should be shared with the New Business Acceptance Department.
4. Fee earners should disclose any potential reputational or business risks or concerns about money laundering, terrorist financing, tax evasion, bribery, corruption, or criminal activities. In addition, fee earners may be asked to clarify the source of wealth of their client and the client’s beneficial owner, the source of funds for the work they are undertaking, and supply necessary authorizations and/or client verification documentation to the New Business Acceptance Department.
5. The New Business Acceptance Department initializes new client matter billing accounts, addressing any outstanding issues, such as tracking receipt of the signed engagement letters, the negotiated outside counsel guidelines and/or billing guidelines, and any other remaining items. For low-risk clients/matters, this department may also involve anti-money-laundering (AML) professionals to verify client identity and complete client due diligence. For high-risk clients at firms subject to AML regulations (such as firms in the UK and Canada), the AML risk assessment and client due diligence should be completed and fully satisfied immediately after the conflicts resolution stage and prior to accepting the business.
6. The New Business Acceptance Department disseminates information concerning pending and newly initiated matters to relevant fee earners. The Department may also involve conditional approvers (such as practice group leaders, client segment leaders, the pro bono committee, the new client committee, etc.) based on the nature of the matter.

Is your conflicts database regularly updated?

For every new matter or business opportunity, fee earners and/or their assistants should provide pertinent information to the New Business Acceptance Department and/or conflicts team for immediate inclusion in the conflicts database. The following information for each pending new matter should be entered:

• the name of the client or prospect
• the names of all potentially adverse parties
• other persons or parties with an interest in the matter (for example, key people, partners, joint venturers)
• the nature of work to be performed
• the area of law
• the status of the client

If any of this information changes, or if new details emerge, it is imperative to promptly amend and integrate these new specifics.

In my “health check” assessments of conflicts databases, I pay close attention to the quality of data and check for the following problems:

• manual rekeying of information
• systems and processes that are not fully integrated
• conflicts check and clearance taking too long
• difficulty identifying and locating previously collected information
• any inefficiencies in updating client status and matter status

Additionally, I examine how firms manage the closure of inactive matters and clients. I also help firms identify opportunities to improve their client matter processes, controls, and policies.

Is your conflicts team well structured?

The Conflicts team should include a variety of analysts, with each playing a distinct role in the process. For example, the firm may choose to assign a junior conflicts analyst the responsibility of vetting all new client matter requests. A secondary conflicts analyst can focus on performing conflicts checks, assessing various risks, and managing the firm’s client matter information. The conflict supervisor would seek conflict clearance, secure proper documentation, and resolve identified issues.

Do your conflict searches evaluate your clients’ corporate trees and affiliations?

A thorough conflict search involves not only reviewing the potential client or the actual parties involved in the matter for possible conflicts but also checking their corporate affiliations, beneficial owners, board of directors, and key executives against your conflicts database. Your firm can achieve this comprehensive research by relying on third-party data providers, such as Dun & Bradstreet (D&B), Standard & Poor’s Capital IQ, and Bureau van Dijk (BvD). The Intapp Conflicts platform can be integrated with such trusted data service providers, enabling users to research corporate affiliations and document the relationships between potential and existing clients.

Can your team easily interact within an online system?

Is your process for checking and resolving conflicts online? Can team members easily communicate with other users from within the system? With the Intapp Conflicts online system, users’ comments automatically generate emails to the appropriate party. Moreover, users can record the resolution of these conversations in the online report, thereby creating a record of how the clearance was done, who was involved, and the resolution.

How does your firm manage conflict-of-interest waivers and other client terms?

It’s essential to record consent waivers and all client terms within your conflicts database. Doing so keeps your firm informed about prior client agreements and helps maintain compliance when onboarding new clients. An example of client terms is when a client prohibits a firm from representing competitors.

Does your approach achieve data security?

How does your approach enable data security and confidentiality? Are robust security measures in place to protect sensitive client or matter information? Intapp Intake and Intapp Conflicts integrate with Intapp Walls to secure confidential client and matter information, automatically creating and enforcing any appropriate confidentiality policies/rules. In addition, these programs secure and protect sensitive client and matter information.

Do you enrich your business acceptance review with third-party data?

Third-party data sources can enhance your understanding of potential clients and parties involved in your matters. This client data can include financial data, registered addresses, legal forms, global ultimate parent company name, beneficial ownership information, or industry-specific information to better assess risks and opportunities. For example, if you learn your client is connected to a larger company that you would love to have as a client, that information would be important to know when you’re deciding whether to take on the client.

Does your business acceptance process generate clear, simple reports?

You want a report that offers a clear, succinct description of the potential client and all the relevant benefits and potential risks of taking them on.

Does your process incorporate automated approval rules?

Incorporating automated approval rules into your new business acceptance workflow ensures that the right stakeholders review and approve new business promptly while maintaining compliance with the firm’s policies. For example, your firm could create a rule that, if a case involves the pharmaceutical industry, a special committee needs to review the matter.

Do you have a tool in place that generates needed onboarding documents?

You can save a lot of time if you develop templates and automations to generate necessary client onboarding documents, such as your engagement letters and terms of business. These automations also reduce the risk of errors and ensure a consistent client experience.

Is your system scalable?

Your new business acceptance system should be able to accommodate future growth and changes in business needs. Your firm must be able to adapt to evolving regulatory requirements and technology advancements.

Does your system have all these needed elements?

Modernizing your new business acceptance system hinges on these key elements: clearly defined new business acceptance policies, a streamlined new business acceptance process, and a robust internal conflicts database that is regularly updated, enriched with third-party data content, and seamlessly integrated with your risk assessment processes.

Achieving such a business acceptance system is an investment that can significantly improve efficiency, risk management, onboarding, and fee earners’ satisfaction.

If you’d like to learn more about how Intapp helps firms build a modern business acceptance process, using software purpose-built for your industry, or are interested in a risk “health check” of your current solution, please contact Yelena.Chervinsky@intapp.com.