The largest loss adjuster in the UK has launched an alternative business structure (ABS) which plans to double in size by the end of this year and expand from property-related claims to personal injury work.
Partner Paul Squires said Sedgwick Legal Services, part of global firm Sedgwick, was “already prepared for the further consolidation and pressure on prices” in the market, “unlike other law firms”.
Mr Squires said: “Greater commercial pressure is coming and there are so many ways you can deal with it.
“Traditional partnerships are not incentivised to invest in the same way. They are designed to make money today. Sedgwick is a completely different model.”
John Hinton, the other founding partner of Sedgwick Legal Services, said a team of seven paralegals at Sedgwick that did pre-litigation work had been “folded into” the new law firm. The aim was to expand this to 15 by the end of 2023, with the ABS already advertising for two solicitor posts.
Under a five-year business plan, the team aims to expand to at least 50 over that period. Mr Hinton said the rate of growth depended on “the people, the clients and the appetite”, and the first appointments would be based at the firm’s office in Bristol.
Sedgwick Legal Services obtained its ABS licence earlier this month. Mr Hinton, formerly a partner at DAC Beachcroft, is the head of legal practice, while Mr Squires, who has worked for DAC Beachcroft and other large law firms, is the head of finance and administration.
The two solicitors are joined as directors of the ABS by the non-lawyer Neil Gibson, the chief operating officer of Sedgwick UK.
Mr Hinton said the firm would begin by handling property-related claims and – probably not until its second year – expand into personal injury work, motor claims and speciality areas such as construction and cyber claims.
He said Sedgwick’s clients wanted a “faster, more integrated” legal service. “At the moment they are only using lawyers at the end of the process – after one or two years.
“The faster that one can get to clients and speak to witnesses, the better the outcomes. We have access to the data, so we can see the losses more clearly and improve the outcomes in terms of speed.”
Mr Hinton said the data could enable the ABS to identify trends and other information and give feedback more quickly.
“We want to be the best offering, with an end-to-end connected product. It is not a distress purchase.
“The number of large law firms for insurers to turn to is narrowing. The operational ability of Sedgwick is easily as good as any law firm. The breadth and depth of the client base is astonishing and it led itself easily to legal practice.”
Mr Squires said the introduction of fixed recoverable costs for most money claims of up £100,000 this autumn would be “good for Sedgwick” but he was concerned that the courts would not be ready for the “large spike in litigation” that he anticipated.
“This is a thing that nobody has been talking about. There’s no reason to spend two to three years with a case in pre-litigation when you won’t get paid. The courts have been struggling to catch up with Covid. What’s going to happen in the autumn?”
Mr Squires said the ABS has “incredible advantages” in being able to rely on Sedgwick for shared services in HR, finance, business services, facilities and marketing. The firm’s financial strength would enable it to “recruit the best lawyers”.
He added that the law firm’s business plan could be “flexed” if there was a need to expand more quickly.
Paul White, chief executive of Sedgwick UK, commented: “The addition of legal services to our robust claims-handling offerings will mean we can provide more efficient and cost-effective solutions for our clients and their customers.”
Sedgwick, originally based in the US, employs over 31,000 staff in 80 countries.