Essex Legal Services has joined a select group of local authority legal departments to become an alternative business structure.

Essex Legal Services Limited (ELS), a company formed by Essex County Council in anticipation of the Legal Services Act, was granted an ABS licence by the Solicitors Regulation Authority on 1 March. The licence came into effect on 1 April.

The firm has been licensed to undertake the following reserved legal activities: rights of audience, conduct of litigation, reserved instrument and probate activities, and administration of oaths.

Councillor Anne Brown, cabinet member for corporate, communities and customer, said: 'This is an exciting opportunity for ELS and will be an essential part of the strategy for growth to generate more income for the council, and increase the resilience of the service.'

Councillors voted to create the ABS at a cabinet meeting of the county council in October last year. The venture was predicted to bring in profits of £2m a year by 2020. 

The council proposed to make staff available to enable ELS Ltd to perform legal work, and in return ELS would pay the council an agreed fee reflecting salary costs and other overheads.

Initial forecasts predict that legal income would create an additional surplus of £165,000 in 2017/18, rising to £1.8m in 2019/2020.

Buckinghamshire Law Plus, a collaboration between Buckinghamshire County Council and the Buckinghamshire & Milton Keynes Fire Authority, became the first business to be granted an ABS licence by the SRA in 2014.

This was shortly followed by HB Public Law, which comprised the merged legal teams of Harrow and Barnet councils in London.

It subsequently took over the legal services of the London Borough of Hounslow and entered into a shared services agreement with Aylesbury Vale District Council. A report prepared for Harrow council’s cabinet in February detailed plans for Buckinghamshire County Council to delegate its legal function to HB Public Law for three years.

A predicted wave of revenue-earning council ABSs failed to materialise afterwards, with many local authorities opting to pursue shared services partnerships instead. However, several councils the Gazette spoke to did not rule out going down the ABS route in the future.

Recent developments suggest that a surge of council ABS formations is on the horizon.

Kent County Council recently announced that its cabinet had approved plans to develop an ABS rather than setting up a joint venture with a commercial partner. The council will apply for an ABS licence by the end of April. The new company will start trading as an ABS in January 2017.

Meanwhile a group of authorities in southern England is developing a business case for licensing a shared legal service as an ABS. Orbis Public Law came into effect this month to provide legal services to Surrey County Council, Brighton and Hove City Council, and East and West Sussex county councils.