Saga Legal admits it stopped taking new work last year

Topics: Conveyancing,Wills & Probate,Alternative business structures

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Yet another big brand name that entered the legal services market through an alternative business structure (ABS) has admitted to scaling back its activity.  

Saga Legal Services said today that it stopped taking on new business last year, after the break-up of the Parabis Group.

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The confirmation comes just weeks after another high-profile brand, the AA, pulled out of the legal services market, and adds to the catalogue of struggles faced by high-profile brands operating as an ABS.

Parabis and Saga entered into a joint venture in November 2013 after Saga secured an ABS licence, with a view to offering conveyancing, wills and probate and lasting powers of attorney.

An administrator’s report following the collapse of the company revealed that Parabis LLP paid Saga £300,000 as a final settlement.

This granted consent to the sales of the Saga business streams and the novation of existing contracts.

The Gazette can now reveal that Saga’s legal services division has been effectively dormant since Parabis got into trouble last year.

A spokeswoman said: ‘As soon as we were aware Parabis were looking to sell parts of their business, Saga Legal Services took the decision to stop taking on new business (will-writing, conveyancing, probate, and lasting power of attorney) to ensure we could focus on our existing customers.

‘In the intervening period the outstanding caseload has reduced.’

Plexus Law took ownership of the Parabis consumer law division and has been managing those cases that remain open.

It is understood that Saga Legal Services has also engaged with Co-op Legal Services - another ABS - to manage a ‘small number’ of new instructions.

The Saga spokeswoman confirmed the company has retained its legal business and will start taking on new business once a new partner can be found.

Saga, which established itself in the financial services and holiday sectors, said it had identified a gap in the legal services market for the over-50s when it started the ABS.

The company had already worked with Parabis on providing certain legal services for 10 years but used the joint venture to expand that provision.

At its launch, it quoted a survey of 9,229 people over the age of 50 which identified concerns about ‘spiralling solicitors bills, being bamboozled by jargon and poor value for money’. 

According to annual accounts for the year ending January, 2015, Saga Legal Services received around 10,700 instructions in its first year.

A number of high-profile ABSs have struggled to match the hype since the liberalisation of the profession brought about by the Legal Services Act.

Co-op Legal Services suffered heavy losses in the early years of its existence, while the AA has abandoned its attempt to tap into the legal market.

Parabis, one of the first firms to receive private equity funding in return for part ownership of the company, was sold off last year owing almost £50m to 2,500 unsecured creditors.

Readers' comments (16)

  • Am I going to be the first to say..... 'It's a game changer!' ?

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  • When will people realise that to do law... you essentially need to be a lawyer...

    Buying a book on teeth and having shares in Colgate doesn't make you a dentist.

    This is a long game, and the idea that there's a quick buck to be made is absurd. Investors are only interested in returns - and quick ones at that.

    If I want my teeth pulled, I want a dentist - if I want my leg pulled, I'd invest in an ABS...

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  • It is a game changer Paul.

    As will it be a game changer once the Claims Handling Society at 113 Chancery Lane, and Claims Handlers Regulation Authority finally mange to punish decent ethical solicitors for being so, that they finally leave their work and set up as something else - claims handlers (mark 2).

    The interesting thing is that they wont be regulated at all.

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  • Psssssst tell Des Hudson.........

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  • I'd suggest this shows that the underlying market for domestic/personal legal services has changed little. While the 'supply side' has been active in offering 'new service access points', the 'demand side' has not changed much.

    The 'Game Changers' have shown it's possible to put large amounts of money into offerings (new or relaunch legal services brands) but unless the potential customers want it and/or understand it, they are unlikely to quickly change their purchasing habits. (remember the Sinclair C5, a great idea nobody bought)

    This isn't a reprieve for the 'High Street' solicitors, but as usual their imminent demise has be exaggerated. As you'd expect me to say, marketing management provides guidance on how to tackle these issues.

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  • The sad thing about all of the ABS scaling back, or pulling out simply confirms the derisory scale of fees that are available to us on the High Street. Whilst it is can be seen as a cause of celebration that we have 'seen off the competition' so to speak, we're still left with the crumbs, enviously looking at non professionals such as Estate Agents, pocketing their 2% and trust me, the Accountants will not be going away.

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  • As usual Alistair has hit the nail bang on the head.

    Law is a long game. Any professional service business is. It is about building reputation/relationships/contacts/trust, not delivering 10,000 email addresses or a trillion views of your web page.

    I do think it is a bit rich blaming it on ABS structure, however. There are plenty of Non-ABS firms that have felt the chill.

    if you get your strategy and marketing wrong, the quality of the underlying service isn't here or there: you won't have any clients to show how good you are.

    Most of these got it all wrong!

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  • I'd be very interested to know what Richard (The End of Lawyers?) Susskind has to say about this.
    Didn't he predict that these big corporates would see us creaking high street players out of the market?
    Or David Clementi for that matter.
    Slice of humble pie, gents?

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  • Excellent, now please go away all you banks of telephone paralegals and claims management systems and all your hyped up marketing drivel and let us hard working, decent high street lawyers get on with the job we have done for centuries!

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  • " .... the Sinclair C5, a great idea nobody bought." are you having a laugh?!?!? You obv. never travelled in London in one.

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