Co-operative Legal Services (CLS) returned to profit last year, although turnover continued to fall, its annual results have revealed.
Though turnover – which reached a high of £33m in 2012 – was down a further 14% to £18m, CLS turned a £5m loss  into a £700,000 profit last year “following work to reduce costs in 2014”.
It attributed the turnover figure to “personal injury volumes continuing to normalise and as we shaped and refined the business back to core service propositions”, while investment in digital technology limited profits.
Staff numbers were up 5% to 355, excluding the 100 staff added by the recent acquisition of wills, trust and probate company Collective Legal Solutions .
Back in 2012, when CLS had about 450 staff, it announced plans  to recruit 3,000 staff over the following five years, but this strategy was ditched.
The Co-operative Group’s annual report, released today, recorded: “We aim to give people an outstanding service and in 2015 we took important steps towards improving our ability to do so. We appointed new experienced heads of probate, family law and personal injury to strengthen the legal services management team, and help us to develop our services and improve member loyalty.
“When added to investments being made in digital technology, they’ll help us to meet the needs and interests of our members across the UK. Our customers gave us a satisfaction rating of 88% for 2015. This ranks us highly among legal services firms.
“But we know we can do better. So we’re investing in technology platforms, workflows and training, sharpening our focus on dealing with legal issues quickly and effectively.”
CLS made a significant investment in face-to-face advice for the first time with December’s acquisition. The annual report said: “We intend to enhance our estate planning services further in 2016 by offering digital products. The addition of digital will allow clients access through their channel of choice.”
However, CLS has decided not to renew its family legal aid contracts. “We had a limited range and reach of services, and developing services required significant investment.” Speaking to Legal Futures, CLS managing director Matt Howells said they had decided that legal aid work was better left to the specialist firms already in the market, meaning CLS will focus on private family work, “where there is a need for transparent fixed fees”.
On personal injury, the annual report added: “The government’s Autumn Statement 2015 announced two proposals that, if implemented, will significantly change the personal injury market. It’s too early to assess the full impact at this stage.”
Mr Howells said that “the only way is up” from now on – and that CLS would continue to look “actively” at acquisitions. The backing for the Collective Legal Solutions deal showed that the wider Co-op Group continued to see legal services as a core offering.
He also indicated that one of the strategic decisions this year would be whether to bring conveyancing in-house. It currently outsources the work  to Total Conveyancing Services in Cheshire.
He added: “This is an exciting time for the business. For the first time in three years Co-op Legal Services has returned to profitability. The annual results announced today were in line with expectations and reflect our on-going work to rebuild the legal services business…
“We firmly believe that in a fragmented market there remains an opportunity to provide customers and members with high standards of customer service, transparent pricing and an affordable range of legal services, that people know and trust.”