The Lawyer Africa Elite 2014 features an in-depth look at 46 leading independent firms’ strategies in 15 key sub-Saharan jurisdictions, as well as the views of in-house counsel from some of Africa’s largest companies... Read more
This year, The Lawyer’s annual ranking of the largest UK law firms by turnover is available as an interactive, digital benchmarking tool. For the first time this will allow you to manipulate each data set against the metrics of your choice.
Jackson reforms spark ABS revolution in personal injury sector
It has been only a week since the Jackson reforms were implemented, but already the impact is being felt in the ABS sector. Last week insurance group Ageas UK agreed to form an ABS partnership with Cardiff’s NewLaw, while motoring giant RAC dipped its toe in the legal sector, laying the foundations for a deal with Quindell Portfolio.
It is the start of a revolution in how the personal injury (PI) business model operates. The loss of referral fee income and prevention of after-the-event legal expenses recoverability has forced volume outfits to look again at how their model operates.
For insurers with big books of personal lines motor business the income gap needs to be plugged and the most effective way of doing that is partnering with law firms.
RAC, with its 7 million members, has the capacity to make a decent profit out of its volume business. Its decision to outsource PI work to Quindell - which acquired PI firms Silverbeck Rymer and Pinto Potts as well as a raft of other PI-associated businesses last year - is a smart one.
Quindell has issued warrants for more than 250 million shares to RAC valued at £0.13 each, the equivalent of a £32.5m shareholding. This would give RAC a financial interest in Quindell.
In effect, RAC is keeping its options open, but the onus will be on Quindell to make the model work and to do this it needs to ‘stack them high and sell them cheap’.
Should it be successful in attracting a permanent investment from RAC, it will give the motoring giant a larger proportion of the PI claims market.
Quindell chief executive Rob Terry is upbeat, claiming the win is the first of many to be announced.
Quindell and NewLaw are not the only ABSs to have made waves in the past week. Parabis, the ABS backed by private equity house Duke Street, last week opened a second base in Scotland with a team from Brodies. It, too, wants a slice of the claimant market.
The forecast? Change and expansion at the top of the market, the emergence of top-level partnerships and consolidation.