Under BT Law’s license as an Alternative Business Structure (ABS) by the Solicitors Regulation Authority (SRA), it offers claims and legal handling services to external clients in four product areas: employer’s liability, employment law, motor claims and public liability claims. BT Law’s team draws experience and resources from BT Legal, its parent company’s corporate legal department.
BT Law adds to the evolving legal landscape in England and Wales as it moves the BT Group and BT Legal from being a sophisticated buyer of legal services to a sophisticated seller. Forum magazine discussed BT Law’s formation and services with Director Archana Makol.
Forum Magazine: Can you provide background on BT Law in relation to its parent company and its in-house legal department?
Archana Makol: Going back a little bit before my time, the way claims litigation was set up was disparate. Geographic offices took whatever came through their doors, handling many claims made on the business and made out by the business, such as injury, road traffic or employment claims. In the mid-to-late ‘90s, claims handling was pooled into a single location in Sheffield. Bits of it were outsourced to insurers and brokers to handle on our behalf for many years but that came back in-house about 10 years ago for several reasons.
BT liked providers that were efficient, drove process and got the right financial results. But it also wanted a supplier that understood the business. Types of claims can look small but have quite a big brand impact. BT wanted that sensitivity in how claims were handled. Since we already had a team in the legal department doing elements of injury work and liability work, BT put the work in-house, lock, stock and barrel.
We didn’t build our claims and legal handling teams to make money. We did it to provide our own business with the best service, efficiency, brand and culture.
When the landscape changed under the Legal Services Act (LSA) and it appeared possible for an in-house legal team under an ABS to offer the same services outside, we got to thinking we could have a go at this. And that’s how BT Law came about. Internal work for BT is done under the BT Legal banner; BT Law only works for external customers.
Forum: Was BT Law fit or retrofit for the ABS purpose?
Makol: The ABS envisaged something different than what we set up. It envisaged multidisciplinary practices and a different law firm ownership from the classic partnership model. I don’t think it recognized what corporate businesses wanted to do. When we applied, I led the year-long project to obtain the licence. The model we came up with, the flexible secondment model, was very much something we dreamt up ourselves. At first the SRA really didn’t understand our ownership structure and who could interfere with our day-to-day running. But the regulator was fairly comfortable with it once we sat down and explained what we were trying to do. We have an agreement between BT Law and the BT Group. They give us resources and then we pay for those resources. We have to make sure that we make margin on what we charge our customers from what we repay internally.
Forum: Who are your customers or clients?
Makol: Generally, they are actually the individual corporate businesses. At the moment our key product is uninsured loss recovery. We do it for our own business. If your vehicle has been hit and you have a minor level of damage that is not under your insurance but you want to get the recovery back, we offer to recover it for you. And that’s probably one of our fastest growing areas at the moment in the motor space. No insurance company is involved. That is a corporation-to-corporation relationship. Our other products have a similar business-to-business imperative.