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In-house Division

ABS case study: BT

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BT’s legal team became an ABS in March 2013. Chief counsel Archana Makol, in conversation with Grania Langdon-Down, explains why they made the decision, and the new subsidiary’s strategy

The strategy behind BT’s move into legal services has been to grow from ‘acorn to oak tree’ rather than take a big bang, revolutionary approach, according to its chief counsel Archana Makol.

“Getting the licence has forced us to put very clear governance and compliance in place. This route brings with it bells and whistles but it feels right to have done it this way”

Archana Makol

It took more than a year for BT Claims, a wholly owned subsidiary of BT providing an in-house motor claims management service, to obtain its ABS licence in March 2013 because it was unknown territory for the SRA.

But, since then, BT Law Ltd has been growing steadily, offering services to corporate clients initially in the motor claims market but with an eye on expanding additional areas such as employment law and public liability.

Ms Makol sits within BT Legal, BT’s in house legal team, as chief counsel, heading up a team of about 60 staff handling volume litigation work covering personal injury and network damage. She combines that with her role as a director and COLP of BT Law.

She says they had chosen to hone their practice so they could offer an end to end service from the notification of a claim up to trial and even appeal rather than outsource the work.

‘When you grow from within as a legal team,’ she says, ‘your perspective is wider than external lawyers because you not only see the legal perspective and risk but also what the business wants.’

Overlaying that is brand. ‘Our brand is incredibly important to us so how you deal with claims is crucial,’ she says. ‘We make sure we pay on the right cases and defend the right cases and do both properly and courteously.’

With all of this in the mix, she says they decided to see if replicating their service for external clients would prove attractive.

They have kept the model flexible. BT Law has access to about 80 staff, including solicitors, paralegals and claims handlers, who remain employed by BT but sign an agreement that they will work for the ABS when required. All the relevant regulations around client accounts, confidentiality, conflict checking sit within the ABS.

So far, clients in the motor claims space include EDF Energy, Network Rail and Chubb Security. BT Law is also doing employment tribunal work for some external clients and is looking to attract customers needing public liability advice.

Ms Makol says they have just recruited someone to lead on business development. ‘Some new ABSs have shouted from the rafters and given revenue targets. But we wanted to make sure our offering was credible so we are building from acorn to oak tree rather than going for a big bang approach,’ she says.

‘Clearly the investment has to pay but we haven’t set ourselves up for a very large fall. I won’t pretend there aren’t people looking over my shoulder asking questions but that is good because it keeps you on your toes.’

Looking back, what stands out from the process? ‘If you asked me a couple of years ago,’ she says, ‘I would have said I would prefer liberalisation of the employed solicitors’ code to an ABS as it would have felt simpler. But getting the licence has forced us to put very clear governance and compliance in place. This route brings with it bells and whistles but it feels right to have done it this way.

‘We are a high profile business so it is important to get it right. But we are making headway and we are at point where it is time to start shouting a little bit louder.’

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