Well-known personal injury law firm Gorman Hamilton has launched a twin-track approach to life after LASPO, part of which has been to form an alternative business structure (ABS) in which a credit hire company has a minority stake.
The second prong has been to launch a consumer-facing brand, True Personal Injury Solicitors, and begin a television advertising campaign that aims to remove the stigma of making a claim.
True is now the trading name of Gorman Hamilton, while the ABS licence has been granted to a separate entity, GH Legal Solutions LLP, which will be the vehicle for strategic partnerships.
The credit hire company is a junior corporate member of GH Legal Solutions, as will be any future strategic partners. Head of legal Kieran Magee explained that the firm preferred this approach to creating separate ABS joint ventures with individual partners as seen so far with other PI firms. He said the model “gives us greater control and a grip of compliance”.
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Mr Magee said he was very concerned by the advent of insurer/law firm ABSs. “As a COLP in their position I would be acutely aware of their potential for conflict of interests. I note the Solicitors Regulation Authority (SRA) is attuned to this too, given Anthony Townsend’s comments at the recent Association of Personal Injury Lawyers conference, where he told me and the other delegates that the SRA was asking insurer ABSs very searching questions about conflicts of interests.
“In my view transparency is essential in these situations so the regulator can ascertain whose interests are being protected and where.”
Mr Magee said the 200-person firm needed a new structure to operate successfully in the rapidly changing personal injury market “but still build upon the strong reputation we have”.
He explained: “This is a different environment, especially post LASPO. We considered that we needed the flexibility that an ABS would give us rather than the traditional model. Unlike other ABS we are not appointing a non-lawyer partner nor specifically seeking external investment. It is about the commitment of the partners to operate a successful model. We thought the ABS would be a good weapon to have in our armoury…
“With the ABS we now consider we have the capacity to develop in a number of different directions should we wish. Should the situation arise we are in a position to offer both legal and associated services to strategic partners.”
The new brand followed extensive market research and senior partner David Hamilton said: “The personal injury market is currently saturated with messages that have helped fan negative connotations of the sector in the minds of consumers. This isn’t just a rebrand – it’s a campaign to reverse some of the reputational damage caused to the industry.”
As you will be aware, it is a legal requirement for advisory firms to carry out ‘know your client’ checks. The purpose of doing so is to confirm your client’s identity and to seek to provide protection in respect of anti-money laundering (AML) and terrorist financing laws. The BHS experience before the House of Commons’ work and pensions committee and business, innovation and skills committee shows that firms need to think beyond AML obligations.