The UK’s leading company formation agent, Jordans Limited, has applied to
convert to an alternative business structure (ABS) in a bid to “move up the
food chain”.
The company, which currently offers a range of services including company
formation, company secretarial, accounting and company searches, now wishes to provide
legal services to existing client companies and also to win outsourced work
from City law firms. It perceives these
as being higher up the value chain than the relatively commoditised areas in which
it currently operates, where costs have been relentlessly driven down through
competition.
As a company competing effectively in an efficiency driven market,
Jordans should be well placed to handle those parts of the law which are
capable of benefiting from process discipline and technology, and it has the
added benefit of an existing huge client list to whom the services can be
marketed.
However, it will need to balance carefully the desire to offer more
valuable legal services with the need to avoid biting the hand that feeds it –
much of Jordans’ current work is believed to come from referrals from City
firms, and they will not wish to cut themselves off from this lucrative source
of work. So for the time being at least,
it seems they are content to stick to relatively “plain vanilla” areas of non-contentious
company and commercial legal work such as
terms of business, share schemes, due diligence, debt collection and, potentially, intellectual property. It
is keen to make it clear that it is not planning to become heavily involved in
transactional work. The company
is quoted as aiming to target companies with a turnover of between £5m and
£500m.
The Jordans
group is 150 years old and its business is structured as three separate
entities. Jordans Limited (the entity making the ABS application) is the
corporate services arm with bases in Bristol, Edinburgh and London. Jordan
Publishing, the second arm of the business, publishes legal information, while the
third, Jordans International, provides corporate services to international
clients and has bases in a number of offshore jurisdictions.
The firm is
currently recruiting for a leader for the ABS business and has 5 paralegals on
the payroll thus far – hardly a market-shaking number, but a start.
The
interesting issue will be whether UK law firms do turn increasingly to
outsourcing work to third parties such as Jordans, or whether in fact they take
the opportunity to start moving into the
space currently occupied by Jordans. I
am aware of at least a handful of law firms who are considering the
establishment of ancillary business in the fiduciary and BPO spheres, in moves
which follow what many of the offshore law firms successfully did many years
ago.
The SRA is
currently reviewing the Bristol-headquartered company’s application for a
licence. Jordan’s hope the approval and
launch will come by early next year, although that may be optimistic
considering the length of the current backlog at the SRA.
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