BT and Carillion have separately extended their legal arms recently to offer more external legal services.
BT Law launched in early March after the telecoms giant received an alternative business structure (ABS) licence from the Solicitors Regulation Authority (SRA). BT Law will provide services to customers in the motor claims market and will expand into other areas such as employment law and public liability.
Meanwhile, Carillion announced at the end of February that it would be teaming up with its longstanding legal adviser, Clarkslegal, to provide cost-effective employment law services to businesses and individuals.
BT Law will incorporate BT Claims, which handles more than 35,000 corporate fleet vehicles. Initially BT’s head of litigation and employment law, Miles Jobling, will become director of BT Law, which will be staffed by 15 lawyers.
However, he expects all 105 staff in his litigation team will move into BT Law in the next two years. BT has around 350-400 staff in its global legal team, headed by group general counsel Dan Fitz.
Jobling said that BT Law was ‘absolutely not going into the consumer space’, but rather servicing companies with some of the largest vehicle fleets in the country.
‘We have created a claims, employment and litigation service all in one place,’ he said. ‘If you look at the vast majority of companies, they have a claims arm and either a solicitors arm or outside counsel. Now we offer a legal service together with other services, rather than separate.’
Described as an ‘employment law partnership’, the venture between Carillion and Clarkslegal will work across the whole spectrum of professional employment law services, from helplines and paralegal support through to advocacy and specialised strategic advice.
The venture will combine Clarkslegal’s employment practice, ranked top tier in the Thames Valley section of The Legal 500, with Carillion Advice Services (CAS), the low-cost legal arm inherited by the construction company in 2011 as part of its £300m acquisition of energy services company Eaga.
CAS, which has 60 paralegals, focuses on providing advice in areas such as debt, welfare, housing and employment. It is not licensed as an ABS as it does not perform regulated legal activities. Carillion panel firms Ashurst, Clarkslegal, Clyde & Co, DLA Piper, FBC Manby Bowdler, Kennedys, Linklaters, MacRoberts, Pinsent Masons, RPC and Slaughter and May are encouraged to refer low-cost work to CAS.
Ties between Carillion and Clarkslegal go back a long way – with Carillion a longstanding client of the Reading-based law firm.
‘With this model I would expect to increase the total amount of work we do because the business case behind the concept is compelling and the model we have with Carillion is so scalable,’ said Clarkslegal chair Michael Sippitt.
Paul Harding, principal of consultancy firm ABS Advisory Partners and a former Dechert partner, said BT and Carillion are likely to make big waves in the legal services market. ‘They have all the resource and the management experience and a lack of prior baggage in the sector that might serve them well,’ he said.
He added: ‘Each of them know how to run in-house legal departments and how to commoditise as part of their legal processes. But practitioners need to bear in mind that entry at the low margin end of the market doesn’t mean that’s where they will stay.’