BT legal chief warns firms of new entrant threat as its ABS eyes expansion

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25 March 2014

Fitz: BT Law still in its infancy

There is no reason why you need a law firm to carry out many of the tasks that traditional firms have previously handled, the group general counsel of BT has warned.

Dan Fitz also revealed that the telecoms giant was looking to expand the work handled by BT Law, the alternative business structure (ABS) licensed last year.

In an interview published on the website of law firm Halebury – which he described as a “trusted partner” of BT – Mr Fitz predicted that over the next five years the trend for new entrants in the legal market will continue.

“This represents a big threat for small and medium-sized firms. The partnership model and ensuing costs base make it difficult for them to copy new entrants. Those firms need to place an increased focus on quality and look much more widely at the way their whole business is run, including the number of trainees they hire.

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“The reality is that they may no longer need the number of trainees they once did if they move away from lower-value work. There will always be demand for the services the top firms provide for bet-the-company matters.”

BT itself has been “moving our lawyers up the value chain by utilising their skills in-house on higher risk and greater value work”, while outsourcing lower risk and lower value work, with Axiom Law its new partner for this.

When looking for external firms, Mr Fitz said that as well as “quality, integrity, diversity and inclusion… we also like firms that are willing to sit down with us to discuss innovation and new ways of working”.

He said BT Law was still “in its infancy”. It handles small tort claims arising from visits by the company’s 30,000 engineers – “mainly bumps, scrapes and breakages”. The majority of claims are handled by claims handlers, managed by a team of three solicitors. “As a result the claims are now concluded far more quickly.”

Mr Fitz continued: “Other businesses have also shown an interest in this service, so we are now offering this as a B2B service for others. Already we have a handful of medium-sized businesses on board and are tendering to a number of larger businesses.

“We’re also beta testing how we can use our excellent employment law team and all the experience they have in handling tribunal work, counselling senior managers and dealing with a wide range of complex HR issues.

“There are lots of businesses that could benefit from expert help of this nature but which may not be able to afford their own in-house provision, so we think there is potential here too. Our philosophy is that as long as the risk and potential liabilities aren’t too high then we’ll give it a try and see what happens.”

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