In-Deed to move in on medium-sized law firms
Rightmove founder has 'no interest in buying small businesses'
In-Deed, the business set up by Rightmove founder Harry Hill to provide seamless property services including conveyancing, will expand into legal services such as will writing and personal injury as soon as the SRA licenses ABS firms, Solicitors Journal can reveal.
Hill said his business would invest in law firms looking for external capital, with a view to launching as an ABS by mid-summer 2012 depending on whether the required regulatory changes have taken place.
In-Deed raised £4.5m on AIM in June this year and Hill told Solicitors Journal investors gave the board an encouraging enough message that he would consider going back to them for a further £6m if necessary.
The news comes after the spate of announcements by other non-lawyer owned organisations seeking to gain first-mover advantage when ABSs go live in early 2012.
Two weeks ago QualitySolicitors announced it had sold a majority of its business to venture capitalists Palamon Capital, and earlier this month the Co-operative Legal Services said it would set up a family legal advice service, to be spearheaded by veteran family lawyer Christina Blacklaws, as soon as legally possible. But Hill said the move was part of the business' strategy from the beginning.
The businessman said In-Deed considered setting up an online service '“ rivalling the likes of the Co-op '“ but considered the costs involved too high compared with those of investing in law firms.
The costs of starting an online will service, for instance, were 'not insubstantial', Hill said, adding it was 'more prudent to seek to invest in one or more good-quality all round legal practices offering a wide range of services such as will writing and motor accidents'.
'We believe it will be better to put clients in front of a firm where we know a high quality of service is provided,' he said.
At present In-Deed is working with a panel of three firms for its conveyancing business: five-partner Stockport-based O'Neill Patient, nine-partner firm Breeze and Wyles, headquartered in Hertford, with branch offices in Bishop Stortford, Enfield and Waltham Cross, and Staffordshire-based Grindeys.
Hill said that In-Deed would be looking to recruit a fourth panel firm, probably London based, to capture some of the work coming from the capital.
He added the firms had been told about his investment plans but that the idea was to keep a hybrid model with a panel on the one hand and direct investment in law firms on the other.
In-Deed is 'unlikely to invest in firms with fewer that half a dozen partners unless the firm makes more than £1m profit', Hill continued. Based on experience Hill believed the typical acquisition target would be a financially healthy firm with older partners retiring and a younger generation looking for capital to take the firm forward.
'We'll have to kiss a lot of frogs before we find the right firms,' Hill commented. 'But we have no interest in buying small businesses or not profitable practices. A lot will be eliminated quite quickly because they won't meet criteria.
He added: 'Due diligence is not going to be a five-minute exercise, but by the time we are ready to press the button the SRA will have got its house in order.'