The founder of Compass Costs – who became head of Quindell Legal Services after it bought Compass – has launched an ambitious new costs business that is likely to become an alternative business structure (ABS) as it expands the range of services it offers.
Pure Legal Costs Consultants – which will go live on 5 May – is promising to provide “a huge array of services to the legal industry as a whole, both directly and through its many business partners and affiliates”.
The main focus initially is on bill drafting, costs negotiation and litigation, but it will be developing a new approach to lead generation as well.
Phil Hodgkinson left Quindell at the end of last year. He set up Compass in 2001 and sold it to Quindell for £14m in 2013. After an initial spell as CEO of Quindell’s costs business, he became chief operating officer of Quindell Legal Services in August 2013, and chief executive in January 2014.
He said: “Pure Legal Costs Consultants is a cost drafting and recovery firm, but that is only part of the jigsaw. We will be creating a business that operates in an innovative way, working within and for the legal market, developing synergies with our many business partners. These are very exciting developments that will change the way this sector operates.
“There will be acquisitions along the way, and we are already working on a number of large and innovative joint ventures. In fact within the next few months we’ll be making announcements about these and a number of large long-term contracts. The make-up of the business will change as we progress, with the likely result being progression to an ABS.”
Mr Hodgkinson argued that the personal injury sector has reached the stage “where an element of greed has taken over”.
He explained: “Providers of work are earning more than solicitors who service their customers, whereas if the providers were prepared to share the commercial benefits whilst still earning similar profits, just over a longer gestation period, then the market becomes stronger and benefits everybody. If these changes are not introduced sooner rather than later, then the market will simply wither and die in its already massively altered form.
“There is an opportunity for claimant firms to dictate and propose the future changes by coming together as one and working as a team, driving innovation and credibility.”
He said Pure will be introducing “a number of initiatives” that are designed to provide law firms with high-quality work, but where the commercial benefits previously retained by suppliers are shared by way of discounted marketing fees, “ensuring that this market can once again return to profitability across the board for all law firms despite the recent and on-going changes, along with other innovative solutions as a whole”.
Mr Hodgkinson said the core of Pure was about sharing the success, and as such all staff will receive a bonus every month the company is in profit.