Exclusive: Co-op Legal to axe 60 PI jobs

Topics: Alternative business structures,Personal injury & clinical negligence

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Co-operative Legal Services (CLS) has told staff it will make up to 60 redundancies in its personal injury department.

In a staff briefing held in a Bristol hotel today as part of an annual business meeting, managers informed the 120-strong department of plans to halve the workforce, with a consultation set to start in January. The Gazette understands there will be no options for voluntary redundancy and talks will now be held with NACO, the Co-operative’s trade union.

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Staff were told the cuts are due to the firm losing a large source of personal injury work last year, with not enough new claims coming in.

A spokesman for CLS told the Gazette: ‘We have announced a restructuring of our personal injury division and formal consultation with staff will begin in the new year.

‘We are keen to consult with colleagues in the first instance and are unable to provide further details at this stage.’

CLS was at the vanguard of the wave of new entrants to the legal sector after the Legal Services Act and was one of the first three alternative business structures to be licensed by the SRA.

But the firm posted a £3.4m loss in the first half of 2013, compared with a £700,000 profit for the same period in 2012. Turnover in the legal arm grew 5.8% to £18.1m.

This week it was confirmed CLS will not be part of the ‘root and branch’ review of the group triggered by allegations made against the former chairman of Co-op Bank, Paul Flowers.

In addition to the redundancies, staff were today told one of the founders of CLS, commercial director Robert Labadie, will leave at the end of this month after seven years with the business.

Matt Howells will take up the role of managing director in 2014, reporting to Alistair Asher, group general counsel for the Co-operative Group, joining the business from Barclays where he was director of UK secure lending.

Interim managing director and chief operating officer Steven Round will continue with CLS to ensure an efficient handover.

Readers' comments (5)

  • So much for the "brave new world" championed by Mark Stobbs - the Law Society's director of legal policy. See his opinion piece "The-Co-ops-a-game-changer" in the Gazette of 16 November 2012. You really couldn't make it up!

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  • Great to see these wonderful new ABSs showing the 'old fashioned' 'traditional' firms the way forward isn't it?

    lets face it, when you have millions in the kitty, armies of paralegals you're employing on the cheap and work ready made for you and delivered to your door, you've got to be doing something spectacularly wrong to make a fist of it haven't you?

    Will the Gazette now take note that if this bunch can't do it, we really don't want to hear any more articles from the likes of the Co-op telling us how we should be 'forward thinking' and changing our business models?

    Personally I am delighted to read this story. Hopefully clients will too, and run for the hills from anyone who isn't a 'traditional' Solicitor.

    Solicitors need to do law. The Co-Op need to stick to selling tins of beans, overpriced funerals, and focus their energy on getting their senior management in order.

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  • Can't they retrain the redundant staff in their academy to do the work they can't recruit people to do?

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  • How will this affect the previous growth strategy to have a legal presence in every town where there is a Coop store? A real shame for the staff who will lose their positions. The brand has taken a real knock with the Banking debacle with Britannia and Mr Flowers seedy life. It is likely be dented even more if there is an investigation into the banking loans made to the Labour Party. It seems that will go on for months if instigated.

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  • 1 The use of paralegals, automated systems and case management systems was heralded as the new dawn of funky legal services. Appraently this was what the modern public wanted!
    2 Recent case shows that such a model is high risk as not talking directly to a client can lead to negligence.
    3 SRA introduced Outcome Focussed Regulation which many saw as a bad thing as prescriptive rules maintained standrads andOFR did not achieve that.
    4 The SRA needs to get out and about and audit the files of the claims farmers and bulk claim industry (the current Right to Buy Litigation is a fine example of claims farming and litigating at a distance at its worst) to ensure that they are working in accordance with the rules and with the ethics of the profession.
    5 I expect insurers will raise insurance premiums for ABSs and large scale "sausage factories" making the local solicitor once again the choice of quality focussed clients.

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