Beaumont ABS – the alternative business structure owned by US giant LegalZoom – has said it is heading towards a “sizeable” profit next year after its first accounts showed a £2.1m loss.
This was due to a significant and planned-for investment after it bought Wakefield law firm Beaumont Legal in early 2016 for £6.4m, according to the accounts for the extended period of 10 September 2015 to 31 December 2016.
It has also emerged that LegalZoom has bought an online company formations business.
Beaumont Legal is best known for volume conveyancing, but also handles wills and probate, commercial and dispute resolution work.
The ABS made a gross profit of just under £2m on a turnover of £6.6m, but ‘administrative expenses’ of £3.4m and amortisation of goodwill and intangibles of £811,000 sent it into the red.
A review of the business by UK managing director Piers Chead explained that the ABS has “invested heavily during the period, supported by its ultimate parent company, in both staff and technology as it explored new innovative ways of working and an intention to provide new ways of supplying legal services to satisfy the industry’s changing needs”.
He said the changes included a new conveyancing portal, a “market-leading real-time communications platform between customer and the company”, and preparations for a “paperlite” office environment.
“These changes have made an important reduction to average timescales for transaction times whilst improving the customer journey.”
Over the period there were on average 169 fee-earners and support staff, and 39 “shared services” staff.
“In the first half of 2017, gross margin percentage [30% to the end of 2016] has already increased despite significant investment in an additional branch office which is only now starting to deliver profitable results,” Mr Chead said. “The company is now profitable.”
He predicted that while this investment was likely to lead to a full-year loss this year, “2018 is forecast to deliver a sizeable profit on the back of a projected strong finish to 2017”.
A spokeswoman added that the investment meant Beaumont Legal was the only conveyancing firm to offer “an app where customers can see the progress of their home move and chat directly with their assigned solicitor”.
She continued: “In an effort to offer even more technological improvements we have recently purchased a development firm in London with over 15 years of experience in providing mission critical software solutions to banks and telcos.
“All of these investments are already starting to bear fruit. August was Beaumont best revenue month ever in its 200 years of trading and it looks like that record will be beat in September.
“Our plan is to continue to invest heavily into the business to find new and innovative ways to make the conveyancing process more efficient and enjoyable for our customers.”
Mr Chead joined from The Formations Company, which it has emerged LegalZoom bought last year. It says more than 300,000 companies have used the site to start their businesses.
His predecessor, Craig Holt, now works at LegalZoom in the US as its chief product officer.
Last year, LegalZoom launched its first product since entering the UK market, an app that enables users to make their will on their phone, and build a “digital scrapbook” of memories and messages to pass on along too. It is backed by advice from Beaumont Legal.