The chief executive of Kent County Council’s long-awaited alternative business structure has outlined ambitious growth plans that could lead to turnover by the local authority’s in-house legal team nearly tripling.
The council hopes to have its ABS application approved by the Solicitors Regulation Authority by November.
All but five of the 125-strong legal team, as well as 30 support staff, will then transfer into the new company, working from new offices in Maidstone. The move will free up 19,000 sq ft of office space currently occupied by staff at the council’s offices in Maidstone East and Canterbury.
Meeting at his temporary office at the council’s headquarters, the company’s chief executive, Geoff Wild (pictured), told the Gazette that ambitious growth targets have been set for the new venture.
The council’s in-house team currently turns over around £10.5m, Wild said. Once the ABS is up and running, the team plans to increase turnover to £14m in the first three years, £18m in the first five years, and £29m in the first 10 years.
‘We’re really going to transform our business processes, our working methods, our use of IT and ability to really improve our customer relationship management,’ Wild added.
The company, formed with the name Invicta Law Ltd, has already secured a 10-year contract to provide the local authority’s legal work.
Wild said he is negotiating with a number of larger law firms to act as their ‘sub-contractor’ for certain work.
He explained: ‘Where you get an American law firm coming over to the UK, having to do a lot of property work for example, they don’t carry large property teams who are qualified in English law. They might think of putting that out to South Africa, India or Poland.
‘What we’re offering them is a local cost-effective alternative to that. We can do all their property legal work for their American clients and they can badge it with their own label at the end of the day.’
Absorbing legal services from other public sector bodies in Kent is another avenue being considered.
‘There are multiple layers of public infrastructure in Kent, all of which have similar legal needs,’ Wild said.
‘They’re all serviced by in-house teams or an external service. So there is a duplication of effort, multiplication of costs and efficiency… [absorbing legal services] is an obvious way to go because all public sector bodies are affected by the financial constraints that have been sweeping across the country for many years now and look set to continue.'
‘One of the obvious ways they can achieve savings is in the area of back-office services, one of which is legal.’
The company is also looking to extend its reach beyond Kent.
Wild said: ‘We’re having conversations with some authorities with a view to them perhaps adopting this [ABS] model – whether it’s through some kind of franchising or joint-ownership arrangement.
‘We’re looking in the north of England, the Midlands. The business model and vehicle we’re creating is currently owned by Kent County Council. You can imagine another authority buying into that model, adopting its methodologies, systems and processes.
‘We would then gain a “branch office” which would reach into those geographical areas we don’t have in Kent, but also providing that area, that authority, with the income stream and revenue that will allow it to grow.’
More than two years have passed since the council was given the green light to develop an ABS. Until the beginning of this year, it had been seeking to form a joint venture with a commercial partner.
Wild said: ‘The council had three objectives from the procurement process: to find a partner who could, together with the council, deliver something that was better, cheaper and more profitable than the existing in-house team.’
He added: ‘Kent’s in-house legal team has been at the vanguard of trading widely. It generates over £2.5m in trading surplus or profit, which it then reinvests back into the council.
‘So it’s done really well as an in-house team. The challenge was to find a partner who could exceed what the in-house team was doing through the vehicle of an ABS.’
However, most of the potential partners the council spoke to ‘were possibly looking more for an outsourced contracting arrangement, simply taking on the council’s legal work’, Wild said.
The new ABS will be wholly owned by the council for the first 10 years. Those not transferring into the new company will remain as part of the council’s new corporate law and assurance commissioning team.
The post of director of governance and law, which was held by Wild, was ‘deleted’ last month.
The new arrangements led the council to create a general counsel post, currently held by Ben Watts as interim general counsel.