“Have we survived LASPO yet?” The question every PI firm should be asking itself

Bott: not afraid to fail

Bott: not afraid to fail

Posted by David Bott, senior partner at Bott & Co

Just because your solicitors’ practice is still trading, you cannot assume you have survived LASPO. Only when the last of the old-world cases have washed through will we know for certain which personal injury (PI) solicitors have survived.

I write that not to scaremonger but as a cautionary note, borne from personal experience here at Bott & Co. In early 2013 we established a seven-point plan to ensure we would be fit for purpose in the ‘new world’. This plan called for us to:

Re-evaluate the profitability of our work-sources

Gary Froggatt, Bott & Co’s financial director, created a profitability calculator to assess whether traditional mixed case suppliers were still providing viable work in the post-LASPO era.

Using our own figures and predictions for average ‘new world’ fees, we calculated cases from these sources wouldn’t even make a positive contribution, let alone a profit.

Bott & Co’s largest work source was an RTA-only supplier but the reduction in RTA portal fees in April 2013 saw cases from this source become unprofitable overnight. Similarly, cases from our third largest work source (a mixed RTA and EL/PL supplier) became unprofitable with the introduction of the EL/PL portal for accidents from 1 August 2013.

As a result, we served notice on both suppliers.

Despite our experience, I’m not surprised to hear many solicitors are still looking to accede to such panels. I believe this is partly due to the reduction in PI cases (as reported by the Institute and Faculty of Actuaries) as well as a determination amongst some to reinvest old-world profit without fully understanding new-world returns.

Bott & Co remain comfortable with our position towards this type of supplier but we will be interested to see how these types of cases fare in the months and years ahead.

The calculator is now freely available to other law firms to help assess their own work sources. Click here.

Re-evaluate the profitability of our fee-earners

On a macro level, 2013’s changes saw material reductions to the margins of previously profitable PI law firms. The challenge was to examine this reduction at a micro level so that we could identify and serve notice on the sources and staff that were driving this adverse position.

Old-world working practices that were profitable in a pre-LASPO environment failed to deliver once the regulations were introduced. As a result, marginally profitable fee-earners became loss makers.

Although we are discussing calculated business decisions based on facts and figures, that is not to say there weren’t some highly emotive challenges to face: we had to terminate the contracts of some of our fee-earners, many of whom had been with the business since it began in 2001.

Acquire shareholdings in the remaining work sources in order to secure supply

Our decision to serve notice on two of our biggest work sources saw a 60% drop in new case intake. The challenge was to restore this 60% whilst securing the remaining 40% through partial acquisitions.

In March 2013 Bott & Co acquired shareholdings in S&G Response Ltd (a successful accident management hire company) and Pinpoint Call Solutions Ltd (an equally successful FNOL and call centre).

These acquisitions secured a significant supply from these work sources and on an exclusive basis.

Establish a ‘new world’ break-even point

With case intake sharply down and ‘new world’ revenues being accrued, it was critical to understand our current break-even point.

We calculated that with our ongoing operating costs and with all old-world cases gone, we would need 400 net new PI cases per month. These would need to be split 90:10 between RTA and EL/PL cases.

In effect, we had to introduce 400 net new PI cases per month by the time most of the old-world WIP had run out. At this point we were trading significantly below this level but we did have the benefit of time.

We have held this as our main focus for 18 months, our key KPI if you like. We reached this point last summer and have attained it every month since. Bott & Co PI now trades profitably on an entirely new-world basis.

Create a strategy to increase the business’s number of self-generated cases

A key element of our ‘new world’ strategy was to achieve 400 net new cases via S&G, Pinpoint and by way of self-generation.

Our self-generation strategy centred on online marketing and cross marketing to our flight delay clients. Our flight delay clients now outnumber PI clients 4:1, providing us with great cross-selling opportunities. The approach we have taken saw self-generated case intake increase four-fold in a year.

Diversify into non-LASPO areas of law

With so much pressure on PI work, we realised we had to balance the risk.

The European Court of Justice’s definitive ruling in the Nelson v Deutsche Lufthansa case two years ago provided us with an opportunity to set up our own flight delay department. The huge success of this department has been well-publicised; however, less well known is the start-up of our corporate debt recovery team, which has been equally as valuable to the business.

The challenges of making small claims track cases pay, run deep and wide but both departments now trade profitably in their own right. Furthermore, having three departments sharing the overhead burden and combining their synergies to obtain a common financial objective is a huge plus.

View indirect staff as profit centres and identify investment opportunities within them

The profitable new-world model discussed in the previous six points would not exist had we overlooked this final point. Operating in the post-LASPO environment required a change in mind-set where we no longer thought like a traditional law firm.

We have made significant investment in some of our indirect departments as a result, including:


We have increased the number of software programmers five-fold in the last 18 months. The new, efficient working practices introduced as a result have already paid back most of this investment.

The benefits that have arisen from our strong IT department are now embedded into our processes for the long term. This is perhaps best illustrated in our flight delay department, where a team of seven staff manage over 20,000 clients. We have learnt so much from this that we are now rolling out these efficient working methods across the rest of the business.


The marketing team has been instrumental in the success of our self-generated case intake strategy. We have doubled the number of staff in this department over the space of a year and their work has seen us regularly feature on television, radio, print and online media. The high point of the past year was being featured back-to-back on BBC News, The One Show and Watchdog.

Client first response team

The CFR department didn’t exist pre-LASPO but now employs nine staff, providing frontline customer service via telephone, e-mail and web-chat for 90 hours per week including weekends and bank holidays.

One of the key skills we have had to learn since last April has been up-selling the deduction of 25% of clients’ damages. We have been very successful in doing so, with just over 97% of clients now signing up to it.

It would lack balance to overlook the adverse effect of these changes. We started 2014 with 74 staff and by October 18 of those were no longer with us: A 24% turnover in staff in just ten months hasn’t been without its challenges.

Having said this, still underpinning the business are 11 of the original 20 staff that helped set up Bott & Co nearly 14 years ago. I have always believed Bott & Co to be a rewarding place for anyone who excels at their job as is certainly the case with this group of staff.

I fully expect Bott & Co to be amongst the law firms that survive these fundamental changes but this is a belief I’ve only recently held with any conviction. The challenges we have faced as a firm over the past 12 months have been many and our efforts to overcome them are only just starting to bear fruit.

We went into the post-LASPO world knowing we had to change but the key to our success was in not being afraid to fail. As they say, failure is not fatal but failure to change almost always is.

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