Co-operative Legal Services is trading at a profit three years after becoming the first consumer brand to enter the legal services market as an alternative business structure, the group reported today.
In final results for the 52 weeks ended 3 January, the business reported an underlying operating loss of £5m, down from £9m in 2013, on revenue of £23m, down from £33m in 2013.
Co-operative Legal Services, part of the Co-operative Group, blamed the fall in revenue on a decline in personal injury income following the Jackson civil litigation reforms and on the ‘restructuring of the business’.
Caoilionn Hurley, financial director, said that all the losses had been incurred in the first half of the year, during which the business’s headcount fell from 560 to 342. In the first six months Co-op Legal chalked up a loss of £5,050,000, but edged into the black in the second half to post a £50,000 profit.
Matt Howells (pictured), managing director of Co-operative Legal Services, said 2015 would be the ‘foundation year for our legal services businesses’.
Describing the results as ‘in line with expectations’, he said they reflect ‘a year of two halves’. Family, wills and probate practices all reported positive growth, he said.
‘This year, we are continuing to lay the foundations to build the business. We will be investing in our people, processes and technology and developing a range of products and services to support customer and member needs.
‘We firmly believe that in a fragmented market there remains an opportunity to provide customers and members with high standards of customer service, transparent pricing and an affordable range of legal services, building a legal brand that consumers know and trust.’
The group said: 'With legal services increasingly a multi-channel, digitised market, we are enhancing our digital platform and capability, which will be released in early quarter 3 2015.'
The Co-op was the first non-legal brand to enter the legal services market following liberalisation in 2012.
Overall, the group reported an operating profit of £172m, down from £177m in 2013, on revenue of £9.4bn, down from £9.7bn. The UK’s largest mutual business announced that the first phase of its three-year turnaround had been completed successfully.
The group announced a ‘member-centric’ strategy for its troubled general insurance business of ‘building strong data and analytical capabilities and developing key distribution partnerships’. The statement added: ‘We are developing similar plans for our Consumer Services Division – funerals and legal.’
However, Howells denied that the investment in technology implied any plan to begin cold-calling funeral clients with legal services offerings.