DAC Beachcroft is the latest firm to enter the alternative business structure (ABS) market gaining a licence for its Claims Ltd as it seeks to future-proof its offering in the sector.
Effective today (2 September), the licence will only apply to the firm’s claims solutions business in England and Wales, and both DAC Beachcroft LLP and DAC Beachcroft International Ltd will continue to be regulated as law firms.
Commenting on the move, Craig Dickson, chief executive of DAC Beachcroft Claims Solutions Group said: ‘Securing an ABS licence for our claims business in England and Wales gives us greater flexibility and capability, in the future, to adapt to changes and opportunities in this complex and challenging market.’.
The move will allow the firm to bring in outside investment or make non-lawyers partners in the business. Mishcon de Reya and Kennedys have both obtained ABS licences over the last 12 months while US firm Cahill Gordon & Reindel used the structure to open up a litigation practice in the City.
It has been tough recently for firms with large insurance practices and margins continue to be squeezed. DAC was no exception, cutting 62 roles following a redundancy consultation and being hit by rising staff costs and IT failure, however the firm posted positive results for this financial year, with a 3% rise in its total billings to £200m, up from £194.4m last year.
The firm also stated that operating profit before exceptional items rose by 10% from £30m to £33m – the use of that metric comes after the firm was hit by an expensive IT failure last year which was booked as an exceptional item and knocked £2.9m off profits, the firm said that whether there are any exceptional items for this year will be determined during the audit process.
In July, DAC unveiled a new leadership team, electing real estate partner Virginia Clegg as senior partner, while insurance head David Pollitt was named managing partner. Clegg succeeds Simon Hodson while Pollitt will replace current incumbent Paul Murray. Both new appointments will take effect from 1 November.