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.
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.
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.