Kennedys has become the latest firm to spin off part of its services offering and open up to external investment in a bid to rapidly scale across the globe.
The firm has today (26 February) launched Kennedys IQ, a technology and software services business owned by, but separate to, the LLP partnership. This brings together a decade’s worth of technology and data initiatives, such as its personal injury claims ‘virtual lawyer’ KLAiM, onto a platform it sells to clients.
IQ, which has been a year in the making, initially brings together six tools which automate or manage day-to-day claims processes, including an incident manager, fraud detector, portal manager, defence lawyer (KLAiM), settlement negotiator and recovery manager. The products are already revenue generating, but will now be housed in a separate entity of 30 staff, including developers and data science teams.
The new business will be headed by commercial director Mike Gilpin, formerly director of IT at Kennedys, as well as former head of R&D Karim Derrick, who becomes product and innovation director. Partner and head of the firm’s innovations group, Richard West (pictured), will be a director at IQ alongside senior partner Nick Thomas, while a governance group overseeing the company includes managing partner Suzanne Liversidge.
‘This is about offering our clients alternatives to traditional legal services,’ West told Legal Business. ‘These are products we hand to the client, and the client is running these processes for themselves instead of using lawyers.’
The company was spun off from the LLP for a number of reasons, although West claims external investment is ‘not even close’ to the top of that list. Instead, it was about creating a separate energy and independence from the LLP, while helping bring in and incentivise technology and software staff in a way partnerships struggle to match. For Gilpin, it comes down to ‘sustainability’.
‘We are increasingly radically changing some of our clients’ processes and if they’re restructuring and reorganising their businesses around it, they want to know it’s a sustainable proposition,’ he told Legal Business. ‘We have some feedback from clients suggesting they wouldn’t normally buy these services from a law firm. That means we also have to change our approach, it doesn’t fit that well within a classic law firm.’
Added West: ‘The LLP model is tried and tested for delivering law services, it’s not tried and tested for delivering technology and software services.’
The firm declined to provide growth targets for the business – Eversheds Sutherland set an ambitious £100m revenue target when it launched Konexo last summer – but says a couple of new products are close to release. West also sees the company evolving to provide consulting services and expanding across professional services, rather than being limited to law.
‘It’s about setting our own pace, we’ve been doing this for ten years and naturally reached this point,’ he commented. ‘We’re not distracted by what others are doing.’
Revenue at Kennedys broke through £200m for the first time last year, and has grown turnover 70% over the last five years on the back of expansion into 37 international offices.