Opti.Cast: An interview with Thomas Müller from Ecovis KSO
What does a law firm need to bear in mind if it wishes to offer its clients case documentation as a service? Thomas Müller, Managing Director of the ECOVIS KSO.
Paul Liese: Good afternoon, Mr Müller.
Thomas Müller: Good afternoon, Mr Liese.
Paul Liese: Strictly speaking, I shouldn’t be welcoming myself, as I’m your guest here. But I’m going to go ahead and do it anyway. Thank you very much for allowing us to be here today to gain some insights into the topic of procedural documentation. I would be interested to hear, from your perspective, what strategic significance this issue held for you a year ago.
Thomas Müller: It’s worth noting that we first began looking into this topic in the summer of 2018. That was when we made our initial contacts, at a time when the subject was also gaining increasing prominence in the specialist literature. We then began holding our first client events at the end of 2018 and actually started offering this consultancy service systematically within our firm at the beginning of 2019. This approach to consultancy was already very important to us at that time, as we saw great potential in it alongside our traditional areas of tax consultancy. After all, this process consultancy was new to us too and has continued to grow in importance ever since, as we realised over the course of this year just how much added value our clients can generate through it – and indeed we as advisers too – because, ultimately, you find that you grow even closer together and, with long-standing clients, you also gain a good insight behind the scenes, which was new to us.
Paul Liese: We wouldn’t have had that before – that glimpse behind the scenes?
Thomas Müller: No, we wouldn’t have had anything quite like that before. The questions asked when describing business processes go much deeper than what traditional tax consultancy is used to when preparing financial accounts and annual accounts.
Paul Liese: And have there been any surprising findings?
Thomas Müller: Sometimes, yes. We do find that even with clients we’ve been serving for years, there are areas – take data protection, for example, or IT consultancy – where there is certainly still room for improvement.
Paul Liese: Your team mentioned earlier that there’s a bit of a mixed picture: there are clients who say, „Great, I’ve got that sorted now – file it away, job done“, but there are also a great many clients who have recognised the added value for themselves. Would you say that, from the firm’s perspective, this also brings added value for you?
Thomas Müller: I certainly see it that way – that we derive added value from this, because within the framework of this consultancy work we certainly go much deeper than we have done over the years when preparing financial accounts, where ultimately you receive clients’ supporting documents and data, prepare the financial accounts and then return them to the client. Through the consultancy work involved in process documentation, we go much deeper, and as a result we also generate significant added value through this consultancy. This is also because the collaboration with clients goes a fair bit deeper than we’ve experienced before.
Paul Liese: So, does that mean you have achieved what you set out to do strategically a year ago?
Thomas Müller: I’d say so, yes. Yes, expectations have been met. We did have to grapple with a few issues along the way. The whole thing was a new area of consultancy, a new approach to consultancy. We had a few issues to sort out with clients at the start, and within our own firm as well. But I have to say, looking back over the past year, expectations have certainly been met, yes.
Paul Liese: In your case, you didn’t just do this on the side; you actually built up a completely new team. This naturally raises the question for many of your colleagues who find themselves in a similar situation: Is it even viable? Is this investment, this strategic decision, sustainable, and do I have the means to cover the costs, whether on the client side or within the firm?
Thomas Müller: Well, I would perhaps start by clarifying that, in principle, clients are obliged to keep records of their proceedings if they generate income from profits. And that is why the question of whether or not to provide advice in this area has never really arisen for us. In my view, we must inform and advise our clients. And yes, we’ve also taken the decision to develop a completely new business area from scratch, which meant we had to invest in staff, in software and also in acquiring expertise – which naturally requires a certain willingness to invest, and perhaps a measure of courage to embark on such a path. But for us, there really was no alternative.
Added value of process documentation
Paul Liese: There isn’t really a long track record to draw on to find anyone else and ask how it works. That’s why this is pioneering work on your part. Many other users of our software have faced similar situations, and the feedback we’re getting is: „It works.“ It’s successful and creates added value for both sides. Where do you see the issue of process documentation in 12 months’ time, or over the next two years?
Thomas Müller: I am firmly convinced that we have left the „obstacles“ to the development of this business area behind us. There were three areas we had to overcome to some extent: on the clients’ side, a willingness to actually draw up the procedural documentation despite being obliged to do so. I actually found that to be the biggest problem, because clients saw it as yet another bureaucratic nightmare. Following issues such as data protection and money laundering, there wasn’t always the willingness to produce procedural documentation. That was the first point. The second point was the staffing situation, which we first had to sort out within the firm ourselves, because we realised that it wasn’t feasible to set up a procedural documentation department using existing staff from our day-to-day operations. We needed new staff with fresh expertise, and we needed software that we hadn’t had until then. We initially tried using Word and Excel to some extent, but realised very, very quickly that this wouldn’t work, so we invested in this area as well.
Paul Liese: Since you’ve just brought up the subject of software: what role does software play for you in the whole process?
Thomas Müller: Alongside the other two issues mentioned, this plays a very, very important role, it is of great importance because we need software which, let’s say, must fully guarantee the creation of procedural documentation internally; this documentation must be technically accurate, must above all be audit-proof, and must be user-friendly for both our staff and our clients. And that is why the software is of fundamental importance to our firm.
Paul Liese: We see it that way too, and we’re hearing the same from many other law firms, because our experience also shows that the process of scanning to replace paper documents isn’t the be-all and end-all. It’s one part of procedural documentation, but it simply doesn’t cover all processes. Would you say that procedural documentation is actually the cornerstone for related areas which clients do not yet have, but will need – or, in fact, should have had for a long time now – if we look at the issue in this way? ICS, such as a text compliance management system, etc.?
Thomas Müller: Yes, that’s how I see it. It certainly depends a bit on the size of the company you’re talking about and dealing with. But there are certainly a great many companies where the issue of text compliance systems will be a major concern in the future. I do think that it will become increasingly important in practice, yes.
Paul Liese: Thank you very much for the information and your comments. I think this might be of some help to one or two people watching this video who are also facing the question: „Should I do this with my practice? Should I tackle this issue?“ Do you have any questions for me? I’m sure I’m not the only one asking questions.
Thomas Müller: I don’t really have any more questions at the moment, no.
Paul Liese: Right, well then, I’d like to say a big thank you for your hospitality, for your time and for all your trouble.
Thomas Müller: I’d be delighted.
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