Upstart insurance ABS Parabis outperforms mothership BLM
When lawyer Tim Oliver quit Berrymans Lace Mawer (BLM) at the turn of the century to launch his own firm he could not have foreseen that the start-up Plexus Law would eclipse BLM’s revenues within a decade.
Last week Parabis unveiled turnover of £139m, 80 per cent of which – £110.5m – is generated by defendant and claimant firms Plexus and Cogent. Even without rehabilitation and loss adjustor subsidiaries Parabis is 30 per cent ahead of BLM and not too far behind Kennedys, which revealed revenues of £117m for the year.
Anyone still doubting the impact of the Legal Services Act need only look to the insurance market. Parabis broke new ground last year when it gave up 51 per cent of equity to private equity house Duke Street.
While expanding its geographical base the firm has signed up to handle claims for insurer Saga and last week announced plans to partner with consumer giant Direct Line. The latter has a significant base in Glasgow that is being restructured, with more than 100 roles going as it aims to make £100m savings across the group.This laid the foundations for the launch of Parabis Scotland, gifting it offices in Glasgow and Edinburgh, as well as a £90m merger with Greenwoods.
This is the kind of work Direct Line would once have farmed out to a panel of firms. In setting up an ABS of its own and agreeing a partnership with Parabis, it is making a huge saving.
Of course, it is not alone in this. Co-op farmed much of its clams handling to Pannone before setting up Co-op Legal Services (CLS). In response to this and no doubt other ABS’ moves, Pannone launched referral network Connect2Law.
Earlier this month Pannone hired CLS co-founder Jonathan Gulliford to bolster its affinity division, underlining the race for white-label clients.
Meanwhile, the traditionalists are losing ground. BLM, like DAC Beachcroft, will have its own views on commoditisation, but it may be too little, too late.