Essex councillors have voted to create an alternative business structure that could bring in almost £2m a year by 2020.

A cabinet meeting of the council yesterday agreed for the in-house function at Essex Legal Services to seek business from a wider range of clients.

The application for an ABS to the Solicitors Regulation Authority will cost around £2,500 but will then be expected to generate income for the local authority under the strapline ‘First for Public Law’.

Subject to approval, Essex will join a select group of local authorities to create an ABS. These include Buckinghamshire Law Plus, a collaboration between Buckinghamshire County Council and Buckinghamshire and Milton Keynes Fire Authority, and HB Public Law, the shared venture between the London boroughs of Harrow and Barnet.

Essex Legal Services Ltd was formed in 2009 in anticipation of the Legal Services Act but has remained dormant since. The company will now seek to offer legal services to the public sector and to commercial companies who are carrying out local authority or other public sector functions.

The company will start by seeking out former clients of the in-house team who have entered the private sector.

The council proposes to make available professional and support staff to enable ELS Ltd to perform legal work, and in return ELS Ltd will pay the council an agreed fee reflecting salary costs and other overheads. The sole directors of ELS Ltd will be Philip Thomson (pictured), the council's director of legal services, and Alex Hallam.

Initial forecasting suggests an additional surplus of £165,000 in 2017/18 which will rise to £1.8m in 2019/2020.

ELS, which was rebranded in July, specialises in childcare proceedings, health, adult social care, education, employment personal injury claims, litigation and property transactions.

A local government thinktank reported in April that a quarter of English councils currently generate external income from legal services and that a further 43% are considering doing so. 

Register here for The Law Society's webinar on in-house perspectives: how to apply for an ABS