PE firm adds digital marketing business to law firm acquisitions

Haden: We can do things together that we can’t do alone

Sun Capital – the private equity firm that owns top serious injury law firm Fletchers – has expanded its presence in the law by acquiring a specialist digital marketing agency.

It also made clear that Manchester-based Blume Group, known until recently as MMA Digital, would not be the last acquisition it makes in the legal market.

Blume will both manage Fletchers’ customer acquisition and look to continue building its own business, with the aim of increasing its current revenue of £20m by another £10m next year.

The transaction is subject to approval by the Financial Conduct Authority, which regulates Blume, and the business will then join an expanded Fletchers Group, taking responsibility for the Medical Law Network, Fletchers’ marketing network for medical negligence law firms, and its customer-facing brand, Patient Claim Line.

By referring some clinical negligence work to other firms through the Medical Law Network, Fletchers achieves some cash flow in a field notorious for the amount of work in progress it builds up.

Blume, which has around 100 staff, operates through two brands of its own: The Compensation Experts and The Medical Negligence Experts.

The deal comes off the back of Blume completing its own first acquisition last month of Liverpool-based digital marketing agency Online Legal, and a year in which it doubled headcount and turnover.

It received funding earlier this year from Rockpool Investments, which will now exit the business.

Blume Group’s chief executive, Dez Derry, will continue to head Blume and join a wider group leadership team.

Alex Wyndham, principal at Sun European Partners, said: “Dez and his management team have built a great business through a successful track record of organic growth and acquisitions, and we look forward to working with them to further maximise Blume’s potential.

“The transformation of the legal landscape in recent times makes this an exciting time for M&A. Areas that are insulated from recession such as personal injury and medical negligence means legal services is an attractive proposition, and this acquisition gives us a strong foothold in the sector.

“We are focused on seeking out and nurturing promising scale-ups such as Blume to help build the industries of the future and our expectation is that we will be completing more deals in this sector during the next 18 months.”

Peter Haden, chief executive of Fletchers Group, said the deal created “the UK’s leading medical negligence customer acquisition specialists”.

He continued: “While our legal practice will operate as a separate entity, we are two highly complementary teams and big champions of the benefits that technology can bring to the sector, both as suppliers to law firms and to improve our service to clients.”

He told Legal Futures that Fletchers and Blume “can do things together that we can’t do alone”. But he made clear that the plan was not to channel more work from Blume into Fletchers; rather, he wanted to expand Blume’s panel of firms.

Mr Haden said panel firms could be confident that Fletchers would not cherry pick the best work either. “Not only would we not want to do that but it would be illegal to do that,” he said. “Even if we were being purely mercenary, it’s enormously in our interest to grow both businesses.”

He recognised that “ultimately proof will be in the pudding”, with Blume’s customers judging it on the quality of leads they received.

Mr Haden said Fletchers would also continue to invest in the legal practice, with a focus on serious personal injury, medical negligence and Court of Protection work.

Sun Capital bought Southport-based Fletchers just over a year ago. In September, Fletchers acquired Leeds firm Minton Morrill – specialising in complex medical negligence and Court of Protection work – following its first deal in May for the personal injury work of Burnley firm Smith Jones and its specialist brand for injured cyclists, Cycle SOS.

Mr Derry said the deal would take the business “to the next level”. He explained: “The added firepower provided by Sun’s investment, and the opportunity for Blume to build on Fletchers’ Patient Claim Line brand and its panel of law firms is a compelling proposition for the market.”

Alex Kenny, chief marketing officer at Fletchers, will be talking about the group’s strategy at the Legal Futures Innovation Conference on 16 November in London. Tickets are still available.

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