Planning is paramount: An Interview with Steve Tregenza, Finance Director at Capsticks
Capsticks is a leading UK law firm specialising in the health, housing, regulatory and social care sectors. With offices in Birmingham, Chorley, Leeds, London and Winchester, Capsticks employs around 450 people, including 55 partners. This interview, in partnership with Katchr, is with Steve Tregenza who joined Capsticks just over two years ago. He trained at PwC in his native New Zealand, before moving to the UK and taking up a succession of finance roles in the media industry. Capsticks, where he leads a finance team of 20, is his first post in the legal sector.
Like many people, Steve has been largely working from home since mid-March.
“We were all set to begin the staged process of bringing people back into the office when lockdown restrictions began to be tightened up again. We’re now back at just a skeleton crew in the offices and everyone else working remotely. I’ve been in twice in six months,” he says.
Pre-2020, Capsticks had enjoyed three years of strong growth. The annual budget was regularly exceeded, and average annual growth was around 10%. The firm’s financial year runs from May to April, so Steve and his team had just had the new annual budget signed off when the pandemic hit.
Ordinarily, once the Excel-based budget was approved, it was used to benchmark performance every month, while an online BI tool was used to project performance for the next month, based on the latest extrapolated data. If any significant issues were identified, they would be analysed in more depth, but, says Steve, there was no great need for comprehensive quarterly or six-monthly forecasts.
Lockdown, of course, changed everything.
“It was immediately apparent that the budget we’d just approved would need to be reviewed. The new one looked very, very different to the one we’d signed off two weeks earlier, as we wanted to do the best we could to protect the business and the people within it,” he recalls.
Work levels have in fact held up very well at Capsticks, and six months into the pandemic, the firm is back in growth mode. The new budget is still a fixed 12-month budget, but it is subject to considerably more scrutiny than previously, particularly in regard to future performance, given the unknown variances as the year progresses.
To prepare the new budget, Steve says the finance function undertook a robust planning process that considered a range of different cash flow scenarios. The first priority was simply to make sure the firm could continue to trade and have enough liquidity to keep going.
“We looked at multiple scenarios in terms of what we thought could happen. The main priority was cashflow and cashflow forecasting. It had to become a lot more robust and more regular than we’d previously done it. We used to do it bi-monthly. In the first few weeks of lockdown, we were doing it weekly. Now we’re on a more steady keel, we’re doing it monthly,” he says.
More scrutiny of data
One area of change was the degree of scrutiny on data. It’s a case of same data, more often and more visible, explains Steve.
“We now spend a lot of time looking at the volume of new matters opened as a metric of how much work is coming in, to be able to forecast future hours. That used to be a monthly review and it wasn’t really scrutinised that much. We are now doing it weekly and it goes to all the partners in the firm,” he says.
The new approach provides a much clearer view of performance compared to budget. In doing so, it gives more opportunity to act quickly if required, based on more robust data.
“It gives us a lot more confidence in terms of whether we’re going to achieve our budget. It also gives us the opportunity to make decisions on resourcing in particular divisions much sooner. Rather than report on a downturn, once it has happened, we can anticipate it and take appropriate decisions. It gives us as much visibility and warning as possible,” says Steve.
It took a couple of weeks for everybody to be set up to work from home, with laptops and other necessary tech being provided by the firm. Although none of the finance team was furloughed, he says it soon became clear that remote working has its limitations, particularly in terms of staff well-being and engagement. Consequently, monthly team meetings in the office have become weekly catch-ups on Zoom; an opportunity for people to check-in, catch up with colleagues and update the rest of the team on what they’ve been doing.
Looking ahead, the big focus is to ensure a new PMS – Aderant – is implemented on schedule next year. A tricky enough challenge at the best of times, never mind with the vast majority of staff working remotely for the foreseeable future.
“We’re looking at a go-live date of June 2021. We may be through the worst of it by then, but we need to plan for a scenario in which we are not. Historically, when you’re implementing a new system, you get the whole project team in a room, you have a testing room, you have floor walkers on different sites, it’s all very physical. How can we replicate that remotely, if we need to? That’s probably going to be our biggest challenge over the next few months,” says Steve.
Three Key Takeaways
1. Scrutinise regularly
The situation is constantly changing. Don’t let your planning lag behind.
2. Use scenario planning
Consider a range of different situations in your planning and assess how they would affect the business.
3. Reassess your KPIs
The KPIs you used to prioritise might no longer be the most appropriate ones. Don’t be afraid to change them.