News in brief: ABS applications update, SfH founder fights on, Eversheds’ "absolute fixed fee" and more
Global reach: Eversheds to act for Tyco in 70 countries
DAS among 30 ABS applicants
Thirty organisations had completed the first stage of the Solicitors Regulation Authority’s application process to become an alternative business structure (ABS), the authority confirmed on Friday morning. They will now receive a bespoke application pack.
Legal expenses insurer DAS has confirmed to Legal Futures that it is one of those to have begun the process. The Co-op and national law firm Irwin Mitchell are among the others.
Kordowski fights on
Rick Kordowski, the founder of SolicitorsfromHell.co.uk, has changed his mind over appealing the High Court ruling that forced him to shut down the website and has now lodged an application to take his case to the Court of Appeal.
Mr Kordowski said that in the event of the appeal being turned down, he intends to pursue the case in the European Court of Human Rights in Strasbourg.
Other websites have sprung up in the wake of the ruling, including SolicitorsfromHell.net and CowboySolicitors.com.
Further investment at Rocket Lawyer
US online legal document business Rocket Lawyer, which is planning to open in the UK this year, has raised a further $10.8m (£7m) in funding from investor Industry Ventures, according to reports in the US.
Last summer the company raised $18.5m from new investors, including Google Ventures.
Eversheds agrees “absolute fixed fee”
US company Tyco has extended its groundbreaking relationship with Eversheds for a further two years after they both agreed that all the operational work across Europe, the Middle East and Africa (EMEA) will be delivered and managed within an absolute fixed fee. This is based on five years of metrics gathered since the relationship began in 2006.
The concept of client approval of upfront estimates on all engagements remains the bedrock of the management and control of costs on both the operational and project engagements.
The contract, as in the previous two, provides that where further control over spend is achieved, both Eversheds and Tyco benefit. “This innovative concept has been the basis of the successful partnership, underpinned by transparency, control and clear metrics for both parties,” a statement from Tyco said.
It said that over the period of the contract, the proportion of premium work undertaken by Eversheds has grown sevenfold and now constitutes a majority of the total revenue from the contract, and includes areas such as mergers and acquisitions, intellectual property and compliance.
At the same time, Eversheds has worked closely with Tyco to reduce operational costs by millions of dollars across EMEA. “This has been achieved through a range of innovative approaches, encouraging system changes, more efficient data use, targeting areas of high spend, strategic use of secondments, re-engineering of processes and effective budgeting and project management practices.”
The new contract will see Eversheds advise the conglomerate beyond EMEA, with work being undertaken in more than 70 countries worldwide.
Bryan Hughes, Eversheds’ chief executive, said: “There is no doubt that the success of this pioneering contract ha
s caused quite a stir in the market. We now utilise many of the disciplines derived from the Tyco partnership with other clients including Brady, Rolls-Royce and Orange and we continue to be approached by many multi-national organisations asking us to demonstrate the benefits of this approach.”
Linder Myers has bought fellow Manchester law firm Rowlands Field Cunningham (RFC) out of administration in the latest stage of what the firm calls its “ambitious expansion strategy”. The extra £5.4m of income will create a £16m-turnover operation with nearly 300 staff, including 43 partners; the aim is to achieve fee income of £25m within three years and the firm has more merger targets.
A Linder Myers statement said that “RFC is understood to have suffered cash flow difficulties”.
Managing partner Bernard Seymour said: “[The merger] means we will have one of the largest clinical negligence, personal injury and industrial disease teams in the country, a very large trusts and estates team, and it will increase the strength of our operations in areas such as commercial property.”
Jon Andrews, joint managing partner of Rowlands Field Cunningham, will join Linder Myers’ management board and will head its national industrial disease team. He said the decision to enter an arrangement with Linder Myers followed a strategic review at Rowlands, which absorbed Manchester practices Field Cunningham and Otten Penna in 2010.
Mr Andrews said: “We started to look at the level of resources we thought we would need in terms of marketing and IT support, dealing with Legal Services Act regulatory issues and decided that joining forces with a larger firm was the best strategic route for us.”
Last June Linder Myers announced the £8.1m purchase of an eight-storey building in Manchester for new headquarters.
Boost for litigation funder
Listed third-party litigation funder Juridica announced a special dividend of 7p (equivalent to 7.7%) after cash proceeds reached $17m (£11m) in 2011, 2.5 times the sum in 2010 (with a cash profit of $12.3m, compared to $1.8m the year before). It follows one completed case for $4.5m and $12.5m from six partial settlements, which it said should deliver further revenues and profits as the cases complete.
A note from brokers Peel Hunt predicts that cash proceeds will accelerate as more cases come to completion. One of Juridica’s commercial arbitration case investments is close to finalisation and three of its five investments in antitrust cases are actively negotiating towards settlements.
The bodies representing Europe and America’s lawyers have written to the managing director of the International Monetary Fund to express their growing concern over demands from the so-called Troika (the IMF, the European Commission and European Central Bank) that countries which need financial bail-outs have to institute radical reform of their legal professions.
The Council of Bars and Law Societies of Europe (CCBE) and the American Bar Association (ABA) told Christine Lagarde, one-time chairman of global law firm Baker & McKenzie, that the reforms in Ireland announced in October following the country’s bailout are inconsistent with regulation independent from the executive branch of the state.
The regulator will have a lay majority, and all 11 members will be appointed by the Irish minister for justice, equality and defense. The government may also at any time remove a member if it appears to be necessary for the effective performance of the regulator.
The letter said the pair are also studying new proposals to reform the legal professions in Portugal and Greece. “We are concerned that initiatives are being taken based on a purely economic approach… without analysing the impact of such proposals on the administration of justice.”
Tags: ABS, Alternative business structures, fixed fees, Litigation Funding, mergers, Online Legal Services, Solicitors from Hell