Duke Street today became the first private equity firm to own part of a law firm after the Parabis Group received its alternative business structure (ABS) licence, the twentieth so far issued by the Solicitors Regulation Authority.
Parabis Group comprises defendant and claimant insurance law firms – Plexus Law and Cogent Law – and a raft of non-legal insurance services from loss adjusting and rehabilitation to risk management.
The deal was , with the ABS licence expected in the first quarter, and Parabis publicly expressed frustration at the length of the licensing process.
It is not known exactly how much of the group Duke Street has purchased, but it says it always takes a majority stake in its investments. The deal values Parabis at between £150m and £200m. In the financial year 2011-2012, Parabis, which employs 1,184 people, achieved a £108m turnover.
Duke Street partner Iain Kennedy said: “Parabis presents a unique opportunity to invest in a fast-growing, dynamic and fragmented sector. The attractions for us are clear: a market leader with an unrivalled track record of revenue and profit growth, a differentiated business model, and the best management team in the industry.
“The intention is to support management with Duke Street’s operational expertise in transforming the business from a professional services firm to a business process outsourcer, and to drive the continued consolidation of the legal services industry via Duke Street’s successful buy-and-build model.”
Parabis CEO Tim Oliver said: “We are excited about the possibilities that being granted an ABS licence now opens up to us. This is a great day for all connected with Parabis. Admittedly, at times, we have felt frustrated at the time it has taken to secure our licence but we are very pleased with the robustness of the application process.”
Samantha Barrass, SRA executive director, said: “Licensing ABSs provides the opportunity to stimulate competition, innovation, and choice for consumers of legal services. Parabis Law is the 20th ABS that we have licensed and the first ABS to be created through private equity ownership. It is a good example of the type of innovation that the liberalisation of the legal services market has enabled.”
The Parabis Group has three distinct operating divisions: Plexus Law, a specialist defendant insurance and reinsurance law firm; Argent, providing expert non-legal insurance services comprising liability adjusting, property adjusting, risk management, rehabilitation, health & safety, audit & legacy; and Parabis Claims Solutions – comprising non-regulated claims activity such as co-sourced and outsourced claims handling, fraud investigations, motor investigations, rehabilitation, vehicle solutions – and regulated claimant legal advice from Cogent Law.