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PI market will shrink to just a dozen firms says legal investor

Hundreds of firms specialising in personal injury could be whittled down to barely a dozen within five years. That was the prediction today from Steve Din, the founder of law firm investor Doorway Capital, as he predicted rapid consolidation of the market driven by imminent reforms of the sector.

Doorway recently acquired the debts of Simpson Millar owner Fairpoint and Din revealed the risk capital investor has substantial funds available to make further purchases.

Speaking at a PI conference in Manchester today, Din said: ’Of the 800-plus specialist PI firms presently in the market, consolidation appears not only likely but, for us, represents a real opportunity.

‘We consider this opportunity will also encompass non-PI consumer law firms. We believe Doorway Capital can force this consolidation by focusing our investment at making acquisitions, making lateral hires and investing heavily in direct marketing.’

Din, a former managing director at Morgan Stanley and Citigroup, told delegates that some High Street banks are expected to retrench from funding small personal injury firms, leaving them to focus on funding just the larger firms.

He added that smaller claims management companies, particularly those that depend on RTA claims, would largely disappear, with the larger surviving CMCs becoming an alternative business structure and possibly integrating with a law firm.

Doorway Capital has come to prominence in recent weeks through its investment in Simpson Millar, effectively becoming owner of the national firm after the administration of its previous parent company Fairpoint.

Din insisted the firm is a profitable business which only posted losses for 2017 because of goodwill repayments.

Over the last two years, Doorway has advanced almost £50m to various law firms needing to fund their work-in-progress, case acquisition and the acquisition of other firms.

The PI sector is set to experience major change in the coming years, with RTA claims subject to a fixed tariff scheme and the small claims limit rising to £5,000 for RTA claims and £2,000 for other personal injury claims. Any claims worth less than those figures will effectively be taken out the hands of PI firms who will no longer be able to claim their costs. Fixed fees are also likely to be extended, following a report by Lord Justice Jackson.

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Lawyers honoured at Manchester Legal Awards 2018

Leading lawyers from across Manchester have gathered together for the ninth annual Manchester Legal Awards.

The sold-out event, hosted by Eamonn O’Neal, saw the region’s legal professionals gather at The Midland Hotel to celebrate excellence in Manchester’s legal community.

The prestigious event was sponsored by Capita Translation and Interpreting, Manchester Law Society’s legal language specialist partner.

The ceremony culminated with Anthony Lyons of Kuits Solicitors picking up the coveted Lifetime Achievement Award for his services to the legal profession following an illustrious 40-year career.

Speaking about the award, President of the Manchester Law Society, Mike Devlin said:

“Anthony is one of the true stand out individuals in the North West’s legal community and he hugely deserves to be the recipient of the Lifetime Achievement Award.

“Throughout his remarkable career, Anthony has exhibited an inspiring commitment to the legal profession, forging a formidable reputation for his expertise in licensing and leisure.

“Reflecting on the tremendously successful career Anthony has enjoyed to date and considering the high esteem in which he is held by his peers, Anthony was a clear choice this year.”

Other individuals to pick up awards on the night were Geraldine Ryan, Hill Dickinson LLP who was named Partner of the Year and Mary O’Rourke QC of Deans Court Chambers – who was named Barrister of the Year.

Zak Golombeck from Slater and Gordon Lawyers was named Solicitor of the Year and Shez Anjum from JMW Solicitors LLP received the award for Trainee/Paralegal of the Year.

Eversheds Sutherland was named Law Firm of the Year – Large while Myerson Solicitors LLP picked up the award for Law Firm of the Year – Medium and Bromleys Solicitors LLP was named Law Firm of the Year – Small.

Fran Eccles-Bech, chief executive of the Manchester Law Society, said:

“Yet again it’s been a wonderful night for everyone involved – all the hard work has definitely been worth it.

“The awards serve to recognise genuine brilliance in Manchester’s legal sector – it’s a considerable achievement to be shortlisted for the awards in the first place, even before our eventual winners are decided.

“The sheer amount of talent on display continues to astound me, and everyone who was nominated should feel truly proud of their achievement.

“The night itself though is a huge amount of fun and I must thank all the judges and sponsors for their commitment and hard work.”

MEN Media was once again media partner to the awards and RMS was again named as marketing and PR partner for the event.

Guests arrived at 7.00pm to be treated to a drinks reception, sponsored by VDocs.

Back on Track was the charity partner for the awards, chosen by Mike Devlin, President of Manchester Law Society.

All entries, with the exception of Lifetime Achievement, were assessed against five criteria. Leading lights from Manchester’s business community met to assess entries during the Judging Day, which was sponsored by Greater Manchester Chamber of Commerce.

The winners of this year’s awards will be treated to a Winners & Sponsors Celebration Reception on March 28 courtesy of Fazenda who are sponsoring the evening.

A total of 20 awards were awarded on the night.

Here is the full list of winners:

Trainee/Paralegal of the Year Award
Shez Anjum, JMW Solicitors LLP

Solicitor of the Year Award
Zak Golombeck, Slater and Gordon Lawyers

Pro Bono/Community Initiative Award
University of Manchester Legal Advice Centre Network

Law Firm Innovation Award
Freshfields Bruckhaus Deringer

Corporate/Commercial – Team of the Year Award
Eversheds Sutherland

Crime – Team of the Year Award
Morton’s Solicitors Limited

Employment – Team of the Year Award
Brabners

Family – Team of the Year Award
Hall Brown Family Law

Litigation – Team of the Year Award
DWF LLP

Personal Injury/Clinical Negligence – Team of the Year Award
JMW Solicitors LLP

Private Client – Team of the Year Award
Slater and Gordon Lawyers

Property – Team of the Year Award
Eversheds Sutherland

Regulatory – Team of the Year Award
Mills & Reeve

Barrister of the Year Award
Mary O’Rourke QC, Deans Court Chambers

Barristers’ Chambers of the Year Award
Deans Court Chambers

Partner of the Year Award
Geraldine Ryan, Hill Dickinson LLP

Law Firm of the Year – Small (1-5 partners nationally) Award
Bromleys Solicitors LLP

Law Firm of the Year – Medium (6-20 partners nationally) Award
Myerson Solicitors LLP

Law Firm of the Year – Large (20+ partners nationally) Award
Eversheds Sutherland

Lifetime Achievement Award
Anthony Lyons, Kuits

For more information about the Manchester Legal Awards, please visit: https://www.manchesterlegalawards.co.uk/

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Jones Day and Skadden named strongest US law firm brands

Jones Day has been named the strongest law firm brand in the United States for the second year running. According to the Acritas US Law Firm Brand Index 2018, Jones Day extended its lead in the table, while second place Skadden strengthened its brand over the past year. Bubbling below the surface, though, is the rising threat to traditional law firms from alternative legal service brands.

Acritas’ index is derived from more than 600 interviews, conducted with respondents in $1 billion+ revenue organizations who have senior responsibility for buying legal services. It also includes the views of a 176 non-US-based senior counsel who were asked which firms they used for their US-based legal needs. Perhaps unsurprisingly, the key trend to emerge this year was of intensifying competition amongst law firm brands, with almost the entire top ten strengthening year on year.

In the press release announcing the latest findings, Acritas US vice president Lizzy Duffy observes: “Jones Day is more favoured this year for its practical style of delivery, along with its global coverage and breadth of services – all areas we know align with clients’ evolving needs, especially now that half of legal departments are assigning responsibility for optimising legal operations.”

The top 20 law firm brands in the US were revealed as:

Rank Firm Brand Index
1 Jones Day 100
2 Skadden, Arps, Slate, Meagher & Flom 85
3 Latham & Watkins 78
4 Sidley Austin 70
5 Baker McKenzie 64
6 DLA Piper 61
7 Kirkland & Ellis 60
8 Morgan Lewis 59
9 Hogan Lovells 54
10 Wachtell, Lipton, Rosen & Katz 48
11 K&L Gates 46
12 Norton Rose Fulbright 41
13 McDermott Will & Emery 38
13 Ropes & Gray 38
15 Weil 35
16 Sullivan & Cromwell 32
17 Mayer Brown 30
18 King & Spalding 29
19 Dentons 28
19 Ogletree Deakins 28

As with the global index, published last year, the majority of the firms in the top 20 boast a significant level of trademark expertise – 16 are ranked for their trademark services in the US chapters of the latest edition of the World Trademark Review 1000 – The World’s Leading Trademark Professionals. Of the remainder, K&L Gates were ranked in Australia, while Wachtell, Lipton, Rosen & Katz, Sullivan & Cromwell and Ogletree Deakins do not feature in the current edition.

As we argued previously, for those in the trademark space, the need for strong brand equity and recognition is particularly acute, and not just with respect to demonstrating to clients a deep understanding of the nuances of trademark law. On the flip side, where firms offering brand-related counselling find themselves embroiled in disputes centred on their own identity, this inevitably gets picked up in the media and can result in reputational challenges.

In short, brand really does matter. After all, in an increasingly competitive market for trademark services, any opportunity to stand apart from rival firms is to be seized upon – and that challenge is set to continue. For its latest ranking, for the first time Acritas scrutinised alternative legal service brands. While still not in a position to rival traditional entities, the data suggests that alternative brands in the legal space – particularly when they are tech-driven – are fast catching up. Duffy observes: “For now law firms still have a richer brand profile – they are seen as authorities in so many more areas of expertise, the current advantage the alternatives have is centred on technology and process efficiency. As clients look for ways to drive value in managing their legal work, the threat from alternatives will continue to rise. Our latest research study shows top of mind awareness of Axiom has almost tripled in four years in the US. Law firms must use this threat as an opportunity to adapt to clients’ current needs.”

As a reminder, Axiom offers lower-cost outsourced legal services. In the trademark space, new models have most commonly appeared in the form of low-cost online-based filing portals, which have come under fire from law firm practitioners cautioning over the commoditisation of trademark work. As we have reported on in detail, new outfits – many with their own dedicated trademark practices – have also entered the market to capitalise on practitioners’ growing dissatisfaction with the traditional law firm structure. Whether through the virtual or subscription-based law firm, an on-demand model or a gamified approach, disruptive innovation is throwing up new ways of doing (legal) business.

While strong, resilient legal brands will help traditional firms maintain market share in the immediate term, there is clearly a need to react to changing client needs and ensure that new technologies are properly harnessed in a bid to stave off new competitors.

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The Asian law firms investing in legal technology

In a highly competitive and low-growth market, firms are increasingly turning to technology and innovation to stay ahead of competition while boosting efficiency and profitability. Asia-based firms are no exception. Those in Australia and Singapore, where growth has been harder to achieve, are leading the charge.

Over the past few years, ‘legal hackathon’ and ‘design thinking’ have become the most frequently used buzzwords among the managing partners of Australian firms. In response to demands for greater value from sophisticated clients, Australian firms are the most advanced group in the Asia-Pacific 100 when it comes to innovation and technology.

KWM, for example, uses a variety of AI products and software either to improve efficiency, for work such as due diligence and discovery, or to help build up contracts. It has also developed its own web-based programs and apps to navigate clients through regulatory and compliance requirements, and to assist with graduate recruitment. Its ‘Being a Clerk’ app aims to help new recruits make the most of their KWM experience.

To generate growth in a highly competitive and increasingly sophisticated market, Clayton Utz recently formalised its innovation strategy, appointing a director of innovation and an innovation team made up of 81 professionals. They employ a science-based approach to grow the firm’s business and address clients’ needs.

Meanwhile, Gilbert + Tobin has been training its lawyers to code software with US smart contract firm Taylor Gerring and invested in start-up online legal services provider LegalVision. In addition, its internal legal transformation team launched the Smart Counsel app to provide free legal resources and answers to in-house lawyers. The firm hosts ‘legal hackathons’ with major clients such as Westpac to develop and prototype innovative solutions to a range of common legal requests and operational issues.

Australia’s mid-tier firms, which probably face the strongest squeeze in the market, are also embracing change. Hall & Wilcox is a leader among its peers. Recently, it deepened its commitment to innovation by appointing legal IT professional Peter Campbell as director for client solutions. The move is set to drive forward a ‘Smarter Law’ strategy, with initiatives such as the development of client-facing technology, improved project management methodology, business process improvement and developing the firm’s knowledge management strategy. Teaming up with technology firm Neota Logic, Hall & Wilcox has also launched a web application that makes it faster and easier for workers’ compensation insurance providers to pursue recoveries.

Elsewhere, South-East Asian network Zico Law and Indian firm Cyril are pioneers in adopting AI and technologies to improve the efficiency and delivery of legal services. Malaysia-based Zico Law’s affiliated listed entity, ZICO Holdings, has launched a subsidiary, ShakeUp Online, to provide professional services over the internet and transform the way in which services are delivered and consumed. ShakeUp is collaborating with the UK’s legal document automation system provider, Epoq Legal, through a Licence and Support Agreement. Initially, ShakeUp aims to provide affordable online legal services to small and medium-sized enterprises in the ASEAN region, offering access to high-quality legal documents that are easy to understand and simple to use. The platform also plans to partner with large companies to help improve the quality and cost-efficiency of their in-house support services.

Cyril Amarchand Mangaldas (CAM) has become the first firm in India to improve efficiency, accuracy and the delivery speed of certain legal services using AI. In January 2017, it signed an agreement with Canada-based Kira Systems, a machine-learning software provider. In May, CAM appointed legal operations manager Komal Gupta as its first head of innovation and AI. Previously vice-president of Integreon Managed Solutions, she will develop and drive the firm’s innovation strategy.

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No ‘MARQ’ to Flipkart

The e-commerce transactions have increased phenomenally in India in the last few years, this movement has been spearheaded by Flipkart and Amazon in India. Recently, Flipkart in a bid to increase its influence in electronic goods market launched a new brand ‘MARQ’ however, this trade mark faced legal issues because of its similarity to a prior registered trade mark ‘Marc’ also being used ofr electronic appliances. This case, M/s Marc Enterprises Pvt. Ltd. v. Flipkart India Pvt. Ltd. was filed before the District Court, Patiala House in New Delhi.

Marc Enterprises claimed that it was using the trade mark ‘Marc’ since 1981 and in respect of electronic goods the mark was being used since 1984. It was submitted that Flipkart had filed for registration of the trade mark ‘MARQ’ on a proposed to be used basis and has admitted to using the mark only from 2017 therefore, it should be injuncted from using the trade mark ‘MARQ’. Flipkart submitted that though Marc Enterprises was aware of Flipkart’s use of the trade mark ‘MARQ’ since 2017, yet no steps had been taken by it at that time to prevent Flipkart’s use of the same.

The Judge heard the parties and ruled that here was phonetic similarity between the marks ‘MARC’ and ‘MARQ’ and since the trade mark ‘MARC’ was being used since 1981 the proprietor thereof had a better title. Therefore, Marc Enterprises was successful in establishing a prima-facie case and an order of injunction was passed against Flipkart. This is a reminder that prior to adopting a trade mark every company must ensure that a prior search is done in the database of the Trade Mark Registry to avoid any possibility of legal conflict in future.

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Law firm Gordon Dadds has eye on London acquisitions

There is little complication with this stock. Gordon Dadds takes law, accountancy and wealth management firms and merges them.

The advantage is that Dadds looks after all the functions the acquired firms may consider non-core — such as marketing, IT, HR, insurance claims and arranging office space.

The other upside — particularly for law firms — is they can break away from the partnership model and function more like a “normal” corporate company.

Adrian Biles, chief executive officer and a lawyer himself, explains: “Partnerships require heavy levels of debt to operate and are notoriously bad at investing in things like technology as this takes away from the pay pot. Lawyers are also not trained to manage and by implementing this model they can concentrate on revenue and profit share, while we do the funding.”

Dadds listed on AIM last August through a £18.8 million reverse take-over by Work Group. Work was a recruitment firm which sold its business to Capita in late 2015 and remained a shell. The deal made Dadds the second listed law firm after Gateley.

It has acquired four law firms since the float, the latest last week when it paid £1.9 million for Cardiff-based Thomas Simon. The UK legal market is big business, clocking up £30 billion in fees last year alone. There are 10,000 registered law firms, with the top 1000 accounting for £6.5 billion in fees.

Dadds has £9.9 million cash on the balance sheet and plenty of firepower left, as acquisitions are paid for in instalments.

For instance, Dadds bought the whole share capital of Thomas Simon for £187,500 on and will pay the rest in 20 quarterly instalments.

Dadds has mostly been acquiring firms from the middle market but has its eyes on landing a major name. “We’d certainly look to snap up a renowned central London law firm. We talk to a lot of firms and complete on 20% of the people we meet.”

The major threat for the company is that there is plenty of competition in the legal space from newcomers, and it is difficult to predict what the future of the industry will look like.

It has been underinvesting for years, and firms such as Keystone Law, which listed in November, have stepped in to fill the gaps.

Keystone has developed an IT platform through which its lawyers can work from remote locations, providing offices when meetings are required.

The firm avoids the costs of maintaining office space, and the lawyers avoid the costs of commuting. It is forecasting market-beating profits.