Gibson: traditional cost base not sustainable

Liverpool-based SGI Legal has set its sights on reshaping the way personal injury (PI) law firms operate having received its alternative business structure (ABS) licence from the Solicitors Regulation Authority.

The firm claims that the cost base and structure of traditional firms will not work as the PI market evolves.

SGI launched just over a year ago, having spun out of Kirwans, and recorded a turnover of £5m in its first 12 months. It has four solicitor partners, who manage the business full-time, and nearly 60 staff, of whom just six are qualified lawyers.

SGI said it will use the ABS licence to develop the full range of legal and non-legal accident management services under its brand, to bring non-lawyers into the equity, and to seek external investment and acquisitions.

The firm is focused on using technology to drive efficiency – more than 10% of staff are IT specialists – and using qualified staff where they can add value.

Managing partner Simon Gibson argued that the way SGI has developed is not so much of a strategic decision as a strategic necessity. “Traditional firms are often not willing to attune themselves to the way the market is travelling,” he said.

“Clients have not benefited as much as their lawyers have from the traditional way in which legal services have been provided. We want to move away from that and focus on what the client wants – which is to get from A to B as quickly as possible. The flexibility ABS status gives us is a key part of our plans.

“The costs base and structure of many law firms is unsuitable for the changing regulatory and economic situation. In my opinion, law firms must structure their cost base and drive efficiency in fee-earning so as to meet the challenges ahead. We ensure that our lawyers add value where their professional knowledge and skills are needed, but we recognise that there is a need to process client transactions using fewer lawyers with a far greater reliance upon IT.

“The values and ethics of the legal profession underpin our practice but they do not mean that law firms cannot embrace new ways of providing their services. Indeed, staying profitable in personal injury will be influenced by the ability of firms to provide non-legal services with those same core principles and values. Our ABS status gives us the foundations to do this.”

Mr Gibson said he also wanted the composition of SGI’s equity and board to be as diverse as possible, “recognising that non-legal expertise at board level will be key for successful firms moving forward”.

His other partners – Michelle Steveson, Stephen Murray and Simon Shaw – are responsible for IT and business process, litigation and marketing respectively.

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    Readers Comments

  • Alex says:

    It is great that the new breed of Legal services company realise that IT is such a huge driver of success and profitability and certainly law firms need to process client transactions using fewer lawyers with a far greater reliance upon IT.

    I totally agree that a firm should be focused on using technology to drive efficiency, but the fact that more than 10% of staff SGI’s staff are IT specialists flies in the face of the cost saving and productivity gains that a cloud / outsourced / managed IT solution offers to law firms.


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