Dubai: international firm sets up debt collection ABS
An international law firm has launched a start-up alternative business structure (ABS) to carry out recovery work after being promised cases with a debt value of £40m by existing corporate clients.
Having successfully obtained a licence from the Solicitors Regulation Authority for the start-up, the firm now plans to become an ABS itself.
Moriarty Law is the debt collection arm of full-service Essex-headquartered firm HKH Kenwright & Cox (HKH), based in Ilford. The firm also has offices in Dublin and Lahore, Pakistan, and claims a substantial deals and contracts practice located in Dubai. It has further “associate operations” in Nigeria and the Caribbean.
HKH partner and the ABS’s head of legal practice, Khurram Mian, told Legal Futures that the clients guaranteeing the initial tranche of work required a dedicated entity with a “fresh and separate approach” and therefore Moriarty would be “a specialist organisation which will be geared completely and solely for that particular purpose”.
He said: “At HKH we do a lot of commercial work, a lot of crime, a lot of family, and were not really geared up to that kind of volume. Our corporate clients needed a specialist entity… to convince them that we could handle that type of work for them in those volumes efficiently”.
He also indicated the demands of high-volume debt collection would not sit well with the rest of the practice. “There’s a certain reputation we want to build for ourselves at Moriarty, which will be a ‘no nonsense’ approach to debtors. That doesn’t always work when you’ve got at the same time solicitors working on cases where they are trying to mediate as well.”
Mr Mian said the partners would take HKH “through the ABS process ourselves now” for two main reasons: the possibility of external investment and due to the more corporate nature of the ABS: “The company structures are much clearer and more transparent and I think it engenders a more business-like approach”. It would help corporate clients understand the firm better and vice versa, he explained.
Asked whether the firm planned to seek external investment once it obtained its ABS licence, he said: “Potentially, yes. Perhaps not just for financial reasons; we would also look a combination of expertise as well – the synergy has to be right.”
HKH had started recruiting for Moriarty, he said, although the timing of the grant of the ABS licence shortly before Christmas was unfortunate from that perspective. Recruitment would continue in earnest in the new year.
The ABS’s head of finance and administration is Harjeet Singhrai. Its licence was granted on 3 December, effective immediately.
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