Well-known legal expenses insurer Abbey Protection plc should complete its acquisition of a law firm early next year, it revealed yesterday after receiving an alternative business structure (ABS) licence from the Solicitors Regulation Authority.
The AIM-listed company – which provides legal and professional fees insurance products and services – has a three-pronged approach to widening the range of legal services it offers to SMEs.
It already employs more than 60 solicitors and barristers in its legal advice call centre, who also provide insured employment tribunal services. Becoming an ABS will allow it to scale up this resource to provide a wider range of commercial litigation services beyond those covered by insurance.
The plan is for Abbey Legal Services (ALS) – which provides the legal help and currently deals with 290,000 calls a year – essentially to become another of the company’s panel firms, to which legal expenses insurance policyholders might be directed. ALS will just be one option and other law firms will remain on the panel.
Further, ALS would seek to offer its wider service range through some of the affinity clients, the biggest of which is the Federation of Small Businesses.
The final arm of the ABS plan is an equity investment in an identified but unnamed law firm, to give ALS access to expertise in areas of practice which it does not initially want to resource in-house. Group managing director Chris Ward told Legal Futures that the acquisition was “fairly close” and that he hoped it would be completed in the first quarter of 2013.
As part of the process to secure the licence, the company’s trading subsidiary, Abbey Protection Group Ltd, will undergo a partial restructuring which will see its Abbey Tax Protection and Accountax divisions transferred to a new, wholly owned subsidiary.
Earlier this year Abbey expressed frustration at the speed with which its ABS licence was being processed. Mr Ward said: “One of the biggest issues has been having to work within the parameters of the 2007 [Legal Services] Act and its suitability for MDP applicants such as ourselves. It certainly doesn’t make the path to ‘a freer and more competitive market place for legal services with innovative and customer focused ideals’ easy to navigate.”
Abbey’s half-year results, announced in September, showed revenue up 5% to £19.2m, and pre-tax profits up 3% to £5.2m. Abbey Legal – comprising Abbey Legal Protection and ALS – delivered £1.2m in profits, while its Accident Line after-the-event insurance business contributed £200,000.