Exclusive: Cooperative Legal Services eyes £100m revenue growth
Co-operative Legal Services – the beacon child of the Alternative Business Structure (ABS) era – is planning major expansion over the next five years to become a £100million operation.
In an interview with Legal futuresCLS chief executive Caoilionn Hurley said he was looking to accelerate growth through the business-to-business partnerships he was forming “and the volumes we would grow through them.”
In 2021 alone, CLS entered into partnerships with 19 new banks, financial service providers and charities. They included Openwork Partnership, one of the UK’s largest financial advice and investment networks, and Elder, a leading provider of home care services.
She said she hoped that as a result turnover would reach £100million in five years’ time – 2021 turnover was £39million, CLS reported last month.
Although it was only up 3%, Ms Hurley said the figure masked the fact that CLS stopped taking new low-value personal injury claims in December 2020, which had previously been a major source of revenue. and earnings – growth was 9% excluding these discontinued operations.
Similarly, CLS’s profit increased by 28% in 2021 to £5m, but would have been 93% if road traffic claims were ignored.
CLS said probate work drove the increases, with case openings up more than 20% year-over-year, with estate planning seeing an 11% increase in revenue .
It has 600 employees in offices in Manchester, Bristol, Sheffield, Stratford-upon-Avon and London; approximately 40% of the people responsible for handling cases are qualified lawyers and CLS offers training and apprenticeships for staff seeking legal qualifications.
In addition to organic growth, CLS has also shown a willingness to acquire businesses and Ms Hurley said that could also play a role in the future.
“We are very open to acquisitions because we still have several people from the first company we acquired [wills, trust and probate company Collective Legal Solutions, in 2016]… We have a team that knows how to integrate businesses quickly and profitably.
CLS was the second ABS authorized by the Solicitors Regulation Authority in March 2012 – despite having been in operation for six years prior – and has seen significant ups and downs over the past decade.
This included a loss of £22m in 2013, a drop in turnover of nearly a third in 2015 to £23m and the 2018 acquisition of Simplify Probate, the second largest company in UK Homologation, which has resulted in CLS declaring itself the UK’s largest provider of homologation services.
Ms Hurley, who studied law at university but graduated as an accountant, joined the company as chief financial officer in 2014 to help stem losses and turn the business around.
CLS’s ambition is now to become an “inclusive and accessible digital law firm“; it added a durable digital power of attorney and digital wills service to its offering last year, for example.
She explained that there were a lot of digital services offered even before consumers engaged with CLS. Although needs were met digitally, CLS still spoke to customers on the phone, she pointed out, and customers who wanted could also have a home visit.
The internal mantra was “however, when,” she says.
Members of the cooperative enjoy preferential rates – one in eight customers in the first quarter of 2022 was a member.
Private client and family are the areas of work that CLS is best known for, but it handles serious injury and clinical negligence cases – Ms Hurley said people “trust the brand” – and it has a small job practice.
She sees court of protection and trust administration work as new areas of practice, but remains cautious about conveyancing, which CLS offers through a panel of law firms instead. to take care of it himself.
“If we were to consider transferring ownership – and were approached by companies looking to sell – we would look at the value we would be able to unlock,” she said.
She continued, “We’ve been very successful because we acquired businesses, invested in digital internally and externally, and made sure we could scale the business as we went. measure of our growth. We just want to double that formula.
While acknowledging the value of the Co-operative brand, Ms Hurley said it mattered little if customer service didn’t match, and she was proud of CLS’s Trustpilot score of 4.7.
“It’s great that there is a law firm owner who is the Co-op because everyone knows that the profits go to community work and the values and mission of the Co-op Group. . Our management team takes this very seriously. This is a great advantage but a real responsibility.
Ms Hurley said she was not surprised other retail brands had not implemented ABS – the legendary ‘Tesco law’ never happened – given that ‘well running law firms is hard work”.
However, there have been more entrants into the unregulated market. “Maybe that’s where people thought it would be easier to get in,” she suggested.
Wills, probate and funeral company Farewill is an example on CLS’s doorstep – it said it had “a lot of respect for how they’ve built a brand in the space”.
ABS opponents have always raised concerns that a business owner might inappropriately rely on their law firm, but there has been no hint of that at CLS, Ms Hurley said. .
The co-op’s general counsel, Helen Grantham, sits on the CLS board of directors and acts as a “buffer” in addition to the agreements CLS has with all the other companies in the group. She succeeded Alistair Asher, the former Allen & Overy partner who was group general counsel and chairman of CLS before his death in 2019.
Ms Hurley said ‘there was nothing he didn’t understand about the nuances of running a law firm’.
The existence of this wider group is also a big part of CLS’s success – legal services are part of the life planning division, also encompassing its insurance and funeral businesses.
“If you think of funerals, insurance and legal services, we primarily appeal to the slightly older segment and people who have families and financial assets – appealing to customers and similar age groups…
“A person who is or has just been through a bereavement may not be aware of such things as the invalidity of the motor vehicle policy for a named driver after the death of the policyholder, vacant properties, funeral wishes – we have unique insight into how to ensure people are fully aware of what they need to know when they walk through a door.
“What we really focus on is putting our arms around people in a constructive way to guide them through these life events or plan for them, [using] the connective tissue of our knowledge – how can we put it to work to really help people.
“We think about it constantly. We are very cautious about regulations, but our job as life services is to use our knowledge and knowledge to protect and make people’s movements much more manageable. »