Holt and Arif 'will not abandon' QualitySolicitors
Chief operations officer defends sale of firm to private equity
Saleem Arif, chief operations officer at QualitySolicitors, has defended last week's sale of a majority stake in QS to Palamon Capital Partners, a private equity firm.
The deal has led to suggestions that Craig Holt, chief executive of QS, and Arif could simply take the money and run, or that Palamon might also want an early exit (see below).
Arif told Solicitors Journal he and Holt would stay 'for at least a decade'.
He went on: 'We've put in too much work to run off and abandon the project. We're taking nothing at all from this.
'We have also agreed with Palamon that we cannot just disappear and they can't disappear without our agreement. Their usual investment horizon is six to ten years.'
Arif did not reveal the purchase price of the new shares issued to Palamon, but said it was nothing like the figure of £100m quoted by one legal magazine. He said the important thing was Palamon's access to funds of up to £700m.
'Palamon has agreed to invest an enormous amount of money to ensure that QS becomes the next Specsavers,' Arif said.
'Our target is to make sure that every town and city has a QS firm in it by the end of next year.'
Arif said this would require around 1,000 branches, a big increase on 220 branches, and 110 law firms, that currently make up QualitySolicitors.
'To be able to compete with the top brands requires real investment,' he said. 'They've got such a massive advantage.
'This puts us on the same playing field as The Co-op, the AA, Saga and DAS, all of whom are definitely entering the market.'
However, Arif said QS would not require member firms to shed their own identities.
'Firms will continue to have their own brand,' he said. 'There's no point in losing the heritage that they have built up.'
Steve Richards, former chief executive of Interflora, has been appointed chairman of QS. In a statement, Richards described the Legal Services Act as creating 'a once-in-a-generation opportunity to create a strong national network of local solicitors operating under a trusted brand.
'Despite fierce competition from the supermarkets, we built Interflora into the sector-dominant brand by focusing on quality and service and I'm extremely excited about repeating that achievement at QualitySolicitors in a similarly frag-mented market.'
Palamon said on its website that it invests throughout Europe in 'service-orientated business with high growth potential'.
Palamon's advisers include Simon Olswang, founder of Olswang and chairman until 2002, and Ron Sandler, chairman of Northern Rock and former chief executive of Lloyd's of London.
Labour peer Lord Eatwell also advises the private equity firm. Lord Eatwell advised Lord Kinnock on economic policy when he was leader of the Labour Party.
Holt revealed earlier in the week that QualitySolicitors would launch a multimillion pound marketing campaign and rebrand next year.
He said the aim was to present a 'grown-up QS', which was more mature and reflected the company's growth. He said the animated puppet-style 'Miss QS' was likely to be 'put out to pasture' and replaced with non-animated visuals.