Co-op Legal Services stems losses and declares 2015 “our foundation year”
Co-op: legal services are core
Co-operative Legal Services (CLS) stemmed its losses in the second half of 2014 and remains a core part of the wider Co-operative Group, today’s annual results have revealed.
While the group has returned to profit – albeit largely on the back of the sales of its pharmacy and farms divisions – CLS recorded a loss of £5m for the year, down from the £9m operating loss in 2013, citing “decisive action” taken on operating costs.
This masked the turnaround during the 12 months, with a £5m loss in the first half and a marginal profit in the second.
CLS financial director Caoilionn Hurley told Legal Futures that underlying profit was actually stronger but the cash had been ploughed back into the business.
Turnover, meanwhile, fell by nearly a third, from £33m in 2013 to £23m, which as reported last year was largely due to a decline in personal injury income following the referral fee ban, as well as a “restructuring” of the business. The poster child of alternative business structures currently has 342 employees working from sites in Manchester, London, Bristol.
The annual report said: “The family and wills practices reported positive growth, and our probate practice recorded a strong performance in a competitive market that faced a decline in the UK death rate. In response to the overall decline in revenue, the operating costs of the business were restructured in the first half of the year to align to the expected trading revenues.”
It said the group has confirmed its core businesses as being food and electrical, funeralcare, general insurance (GI) and legal services.
“We have a new strategy in place for the GI business, completely focused on its desire to become ‘the go-to insurance provider for members of the group’. We will leverage GI’s competitive advantages through this member-centric focus, building strong data and analytical capabilities and developing key distribution partnerships. We are developing similar plans for our consumer services businesses – funerals and legal.”
Group chief executive Richard Pennycock also highlighted an intention to “clearly define the future of our legal services offering”.
The report continued: “We believe that the legal services market remains fragmented, and many member and customer needs are not being effectively met. We are now looking to better define our approach to this market, as we build the business as part of the overall ‘Group Rebuild’ programme.
“We are focused on developing a range of products and services to support our customer and member needs. Our aspiration is to offer fair and transparent pricing for our services, to ensure our customers and members have access to affordable legal services when they need them.
“2015 is the foundation year for our legal services business. We have planned investments in people, process re-engineering and our technology platform, to ensure we are offering our customers the products and services they require. With legal services increasingly a multi-channel, digitised market, we are enhancing our digital platform and capability, which will be released in early quarter three.
“As a business we remain focused on customer satisfaction. During 2014 our customer satisfaction score remained consistent at 89%. Our investments in people, process and platform will continue during 2015, to support our aspiration to provide our members and customers a leading customer service within the legal services market.”
CLS chief Matt Howells told Legal Futures that the current focus is on formulating a strategy. With the wider group expecting it to take three years to rebuild after the crisis that hit its banking operations, he predicted it would take that time to return to the 2013 level of turnover.
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