5 October 2012

Exclusive: small business adviser eyes law firm acquisitions as part of push into legal services

A company that currently provides small businesses with accountancy and HR advice is set to move into legal services, with an alternative business structure (ABS) application and the acquisition of law firms likely, Legal Futures can reveal.

ClearSky’s aim is to become a single point of call for all services a small business requires. It will offer unlimited advice on everyday business law matters, such as employment and property, on an annual contract. The accountancy service costs from £95 to £245 a month, and HR service £55 or £95 a month, depending on the service level.

It would look to partner with other practices to handle more complex legal work, such as mergers and acquisitions, and litigation.

ClearSky is part of Optionis, which also owns employment organisation Parasol and recruitment technology company Silverline.

Optionis managing director Derek Kelly told Legal Futures that ClearSky is to design and test the concept over the next six months and, if it proves successful, roll it out next spring. The company’s usual approach when it scales up an operation is to acquire “one, two or three small practices strategically around the UK” to augment remote advice, he said. This would necessitate an ABS application.

He said ClearSky would be testing whether it could attract 3-5,000 clients to service on a regular basis; ClearSky Accounting, which has offices in Warrington, London and Poole, has grown from 1,400 clients to 3,600 over the past two years.

Mr Kelly said there are significant cross-selling opportunities with the other ClearSky divisions as small business owners want “one source of trusted advice… If they trust us to give them accountancy advice, why would they not trust us to give them legal advice?”. It is “a logical step” for ClearSky and one with little risk – “we’ve got the client base and we’ve got the delivery model”, he said.

He argued that high street law firms are too expensive, and clients are put off by the open-ended nature of hourly billing. Further they are set up in a way that is more convenient to the lawyer than the client; ClearSky is “organised to [the client’s] convenience”, and is open until 8pm and on Saturdays.

Mr Kelly said for many business owners, face-to-face advice is not that important. The experience with ClearSky Accountancy is that “not many people want to see you – they just want the advice”.

“I think the market is crying out for this,” Mr Kelly continued. “It’s a great time to be getting into it.”

Optionis is planning to grow by launching or acquiring other new businesses as well, including niche tax services.

 

By Neil Rose

Tags: ABS, Alternative business structures, fixed fees

One Response to “Exclusive: small business adviser eyes law firm acquisitions as part of push into legal services”

1. There really are no green fields. The market leaders in this sector – contractors freelancers and ‘IR35 refugees’ such as Brookson, Gabem, etc have been looking to migrate up from their ‘one-man-band’ market for a long time. They actually pose a much higher threat to the accountancy and payroll markets than the legal one – but this industry was born out of IT and construction contractors having their lives made a misery by heavy handed regulation from HMRC and a succession of sledgehammers applied to some very small nuts over a decade ago. Once again, most lawyers were not only largely unaware of the issue but even those that were could do little to help – these are by definition typically very small clients. It took fighting funds and class action defences through groups like the PCG to get the matter taken seriously and frankly HMRC were very heavy handed throughout.

   The more interesting issue currently is how, while these valiant entrepreneurs were being slated , litigated against and roundly harassed throughout the noughties, it turns out that not only were many of the journalists reporting the issue within the BBC using the same approach, but even many of the top brass within Whitehall – as the saying goes – you really couldn’t make it up.

   Is this a challenge to the High St law firms? Not really – as where were they when the help was need over a decade ago? Once again a real meetable legal need was tackled only through concerted DIY action.

   The solution – should HMRC choose to accept it – is for them to see the reputable and if need be certificated suppliers of contractor services such as Parasol as inside the tent, not tax evaders. Were they to delegate or certificate the management of tax collection processes to them through their umbrella services which cover many tens of thousands of complex and micro traders, not only would the tax take be higher, but the costs significantly lower than the current approach.

   And this would free them up to tackle the borderline avoidance cases in the hundreds which are emerging in West London right now…

David R Johnston on October 5th, 2012 at 10:45 am