Company formation leader Jordans to enter legal market

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.