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Exclusive: Future of BT’s ABS under scrutiny

BT: DWF outsourcing deal

The future of BT Law is under scrutiny as the communications giant that owns the alternative business structure (ABS) moves to focus more on its core business, Legal Futures can reveal.

It has also recently outsourced some of its legal team to listed law firm DWF.

BT obtained an ABS licence in 2013 [1] and the firm uses BT’s in-house team of over 70 legal and support staff to provide services to external clients, particularly those with large vehicle fleets.

According to the BT Law website, it handles around 7,000 motor claims annually – recovering over 94% of insured losses – 6,000 public liability claims with a value of over £8m, 500 employers’ liability claims with a value of over £20m, and 200 employment tribunal claims.

Its most recently published accounts – for the year to 31 March 2018 – showed that BT Law made a profit before tax of £118,000 on a turnover of £419,000, figures that were up 59% and 11% respectively.

However, a BT spokesman told Legal Futures: “We are reviewing the future of BT Law within BT Group and are considering how best to support the needs of BT Law’s customers.”

In July, BT announced a partnership with DWF to provide legal support for claims and real estate matters.

As part of the five-year agreement, BT is transferring staff from its existing in-house legal teams to DWF. Sabine Chalmers, group general counsel at BT, said: “We are transforming and simplifying the way we work across BT – building strategic partnerships will play a big part in this.

“Our agreement with DWF will ensure we continue to receive outstanding insurance and real estate legal services while partnering with DWF a fast-growing and innovative legal business.”

This is also against a background of BT closing 270 of its 300 offices around the country and selling its London headquarters, and last month selling its commercial fleet management business.

There have also been a lot of press stories in recent months about BT looking to sell off various other businesses, including legal software business Tikit, various overseas operations and its cable-making unit.