Kent County Council to pursue joint venture and ABS for legal services

Kent County Council is to seek a commercial partner to establish a joint venture and alternative business structure delivering legal services to the authority and the wider market.

The proposed model was selected from six options reviewed by external consultants and last week put before the council’s Transformation Advisory Group, which comprises senior members and senior officers.

If implemented, the move would see the 125-staff strong team at Kent Legal Services transfer to the new company.

Geoff Wild, Director of Governance & Law at KCC, said: “We are very much looking to transfer staff to the vehicle, have an injection of capital and resources of various kinds from our commercial partner and deliver legal services to a much wider market as well as delivering those services back to the county council at a reduced cost.”

Wild added that the local authority would benefit in three principal ways, namely by “having a saving on its legal bill, an income stream from the company that is jointly created, and a capital asset”.

The council could get a premium for this capital asset upfront or alternatively it could “cash its chips in later if it wishes to, assuming the venture is successful”, he added.

Wild said each of the six options had been subjected to a scoring mechanism and one clear option – the joint venture/ABS – had come forward.

“There has been a lot of external validation for this as well as internal preparation,” he added. “Now we are moving to a detailed business case which will hopefully confirm the findings of the outline stage. Subject to that, there will be a formal decision taken by the Leader.”

The drawing up of the detailed business case is expected to take about another four weeks. At the same time a public interest notice will go out to the wider market to invite expressions of interest.

Wild said that preliminary discussions were being held with the Solicitors Regulation Authority to prepare them for the application, “to warm them up to the idea”.

He added that the council would be looking for a partner that has already had approval from the SRA for the establishment of an ABS and so would have done a lot of the preparatory work already. “We will bolt on our function to that existing ABS to save time,” he said.

The council expects to go out to the market to procure the commercial partner during the early part of this summer.

“We are looking hopefully within a period of 12 months of it [the new venture] being established – that is approximately what the timeframe is,” Wild said.

He added that the potential of the selected model was significantly greater than other options in a changing market where many local government services are being outsourced, the commissioning model is becoming widespread and organisations – because of spending cuts and reduced activity levels – are spending less on legal services.

The review of Kent Legal Services was one of a number undertaken as part of the council’s Whole-Council Transformation Plan.

The first phase of this strategy – which will see Kent become a commissioning authority with a greater focus on outcomes as part of plans to save £239m between 2015/16 and 2017/18 – was endorsed by councillors in September last year.