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Brave New World

Derek Bedlow speaks to Invicta Law’s chief executive Geoff Wild to hear his plans for the local authority-owned ABS launched in June by Kent County Council

GW1 400Invicta Law – the Alternative Business Structure (ABS) spun off from Kent County Council’s legal department – started trading on 1st June. Invicta Law is arguably the most ambitious council ABS to date and only the second (after LGSS Law) to fully separate itself corporately from its originating authority.

At the helm is chief executive Geoff Wild, longstanding Director of Governance and Law at Kent County Council and a well-known radical thinker on the future of local authority legal services. Currently, 130 lawyers and 30 support staff strong, Invicta Law’s ultimate aim is to “become the leading legal services provider to the public sector” within the next 10 years, growing its revenues from £10.8m to nearly £30m in the process.

It is quite an ambition, and Wild concedes that the route to achieving it is an unchartered one. However, he also points out that the current shape of the £3bn public sector legal market - including central government, non-departmental public bodies, emergency services, educational institutions and health providers as well as local government - means that the opportunity is there to fulfil it.

“We think it's right to have a very clear vision and an aspiration about what the goal is to be,” Wild says. “The fact is there isn't a leading provider of legal services to the public sector at the moment. There are a lot of good providers out there but the primary focus of most of those providers is not to serve the public sector. They do an awful lot of other things as well, and the public sector features as part of their wider portfolio.

“We are very much focused on delivering a comprehensive and different service to the public sector than they perhaps have been used to up until now, certainly from the private sector, but also as a support to our in-house colleagues.   

“And we still regard ourselves as in-house in many ways. We're very much rooted in our historic public sector in-house background and we want to hang on to that ethos, understanding that cultural identity for as long as we can. That may not be possible as we morph into our private sector future, but we very much want to retain that if we can.”

The business is organised along seven specialist workstreams, namely Corporate & Commercial; Education Employment and Information; Planning & Highways; Property; Dispute Resolution; Child Protection; and Adult Social Welfare.     

Technology will also play an important role in differentiating Invicta Law’s offering. Invicta has used Peppermint Technology to implement its Microsoft dynamic client relationship management (CRM) system, which aims to provide clients with a state-of-the-art digital service whilst making back office processes more efficient.

The system will enable Invicta Law to automate as much of the legal process as possible, enabling it to deploy its lawyers more efficiently and allowing it to provide fixed pricing and 24-hour access to their cases through a client portal. “This system is built around the customer and that’s really what we want the practice to stand for,” Wild says. “It’s not going to be a traditional law firm in many ways.”

Small beginnings

There is some distance to travel before Invicta Law gets close to its stated aim. While already a reasonably substantial size for a specialist law firm, less than 20% of its revenue currently comes from external sources, with the vast majority of its instructions emanating from Kent County Council, with which it began a 10-year contract to provide its legal services on launch. (Five lawyers, led by Ben Watts, have remained at Kent County Council to deal with governance issues and to act as the ‘intelligent client’.

In recent weeks, however, Invicta Law has scored some notable successes, being one of the 22 legal advisers appointed to the new national legal services framework agreement for the higher education sector (worth potentially £70m a year overall) and also winning a place on the West Yorkshire local authorities panel in July. Wild says that others are in the pipeline.

“We know how much pressure there is on public finances across the board at the moment, so we're looking to provide an alternative offer, a culturally attuned and efficient service, at lower cost,” he says. “We think that, by doing that, we can grow our size.”

One of the criticisms sometimes made of Wild’s approach to traded services is that it threatens the status - and even livelihoods - of the lawyers in councils that send their work to other authorities. This is a perception that he is keen to address.

“We're not trying to take over legal departments,” he says. “We want to support our colleagues in-house, because we know that sometimes they've got an extremely difficult job to do with very limited resources. They're having, at the moment, to choose whether they can bring in staff, and sometimes it's difficult to get the approval to spend on new staff. The whole ethos seems to be, 'You've got to lose people', when actually the wise move would be to recruit people. Or, they've got to go out to the market and buy in their legal service, or they run the risk of not having any legal advice at all, which is probably the worst of the three options.

“So what we're trying to say to them is, 'Look, let us help you'. Not to take over, not to tell you that we're better than you, because we know darn well we're not. We're just saying, 'We want to be a trusted supporter and adviser system to you, to enable you to do your jobs'. It's really trying to sit alongside people, rather than confront them head on. That's never been my style and I don't intend it to be now.”

Moreover, Wild says that there is an additional need for legal advice that the cost of external advice has prevented from being sought. There are also large swathes of the public sector – parish councils and schools, for example – which are significantly under-advised at present.

“I have come across in some of the client authorities we work for where they simply haven't been aware sometimes that there was a legal issue that needed addressing and in consequence, they've been acting unlawfully, sometime for many years, without realising it,” he says.

“Or, they've simply said, 'We'll hold off getting legal advice until the very last minute because we don't think we can afford it'. And then of course at the eleventh hour legal advice either ends up being too little too late, or it ends up being more expensive than if you involve people in the beginning.

“Budgetary pressure is forcing or causing behaviours which place authorities and public sector bodies at risk of acting unlawfully. And it only takes one of those to be exposed - liability, fines, public exposure, publicity and political embarrassment, for it to be a very damaging issue. So what we're trying to do is say to people, 'Look, a stitch in time here can save you an awful lot of problems on the future.’”

Flying the nest

If all goes to plan, the proportion of work coming from Kent will drop to around 50% in five years and 40% at the end of 10.

“We don't want to lose sight of Kent County Council as our main client, but we very much want to be able to not be wholly dependent or predominantly dependent on them in the long term,” Wild says.

In the meantime, the ongoing relationship between Invicta Law and the county council will have to be managed.

“It's got a new role, it's a client, our main client, and will continue to be so for some considerable time,” Wild says, “It's a commissioner now of its legal service, as opposed to having its in-house team, and it's also a shareholder and owner of what will hopefully be an appreciating capital asset. So it's got several hats to wear at different times. Getting those roles defined and clarified and understood by everybody is part of the journey we're on.”

Kent County Council, under Wild’s leadership, has long been at the forefront of the traded legal services model. In the past, however, Wild has contended that the powers and ability act for other public bodies were always available to in-house teams and that there was no need for the expense of setting up a separate ABS. Wild himself describes the process as “four years of toil”. So what’s changed?

The primary difference more recently has been the attitude of the Solicitors Regulatory Authority, (SRA), which has become considerably stricter in its interpretation of the rules on in-house departments’ external activities – most notably with regard to academy schools - over the past three years or so, and Wild expects the regime to become more restrictive still.

“The ability to trade as widely as we would like as in in-house team has become difficult and will become more difficult in future,” he says. “The SRA’s direction of travel has been consistent - the ability for regulated bodies such as in-house legal departments to trade has to be on a level playing field through an ABS and they are restricting more and more that ability to sell services from an in-house position. That's not going to change.”

More generally, the creation of the ABS has enabled Invicta to make investments into technology and the recruitment of senior professionals to operational and business development roles that would never have been possible as an in-house local authority legal team. The necessary physical separation from Kent County Council has enabled the new business to upgrade its office environment, the effect of Wild believes is often underestimated.

“I can't overstate how important the physical environment is to bring about the cultural change that we needed to do by taking staff from an in-house environment to a company status,” he says. “Giving them a very different modern office environment, a professional environment, has done more than any amount of training we could do. They see themselves very differently, and are behaving very differently, which was so important.”

The other advantage of being detached from its parent council is that it is no longer constrained by council pay scales, allowing it to be more competitive with private practice as well as rewarding existing staff for their efforts. This is just as well as Wild says that recruitment represents the greatest barrier to Invicta’s growth plans.

“It's a difficult market at the moment, not only in the public sector but also in the private sector,” he says. “The market prices for good staff are going up, and that's a fact. We're not able to compete, for example, with the top-level law firms in terms of salary and bonus schemes but what we are able to compete with them on, and best them we think, is on the quality of work and the quality of life that we can bring. The flexible working, the additional offerings we can provide which are not just financially based, and it's having that mixture.

“I think a lot of lawyers who have been in a larger law firm don't get the exposure necessary to the breadth and the depth and the quality of work that they'd like to do. They don't have a lot of client interaction, which has been quite an eye opener for me, because working in local government we're dealing with clients from senior politicians down to staff at all levels on a daily basis, and dealing with them face-to-face.

“So as well as people from the public sector, we're trying to attract people from the private sector who want a different experience, and that quality of work, that exposure to clients, flexible and home working, plus a very good package of support and remuneration and reward. Hopefully that will allow us to bring those staff in.”

Growing pains

None of this comes cheap and Kent County Council has made a substantial – but undisclosed – investment into Invicta Law, which it 100% owns. Unsurprisingly, Wild is quick to praise the commitment shown by Kent County Council to the project, but nevertheless the process was far from frictionless.

“What I have learned is how bloody hard it is to set up a business from scratch, and particularly from within a public sector body,” he says. “It's almost like giving birth, but the gestation period as being more than an elephant, and the labour pains being excruciating, and the umbilical cord has proved difficult to cut. It's because local government is, on the one hand, a very traditional organisation and very bound up in its statutory basis and its rules and regulations and procedures but it's very conscious of its need to break away from that at the same time.

“So there's this real tension going on all the time in local government, about the desire to do things differently, the will to experiment and explore new opportunities, but then forever being held back by the regulations and the rules and the traditions sometimes, and the politics on occasion, that inhibit that sort of entrepreneurial spirit. That spirit is there in abundance in most authorities but it's not being given room to grow. It's like a little plant, a little seedling, in a dark corner, it needs the light and it needs to have lots of feeding and nurturing and so on.

“Fortunately in Kent I have been very lucky to have some fantastic support, particularly from my leader, Paul Carter, who's been a huge supporter who has not wavered at all in his support of me and this venture, and also David Cockburn, Head of Paid Service, and the senior officers at KCC who have allowed this to happen, in the face of extreme financial adversity.”

Consequently, Wild is not expecting a deluge of similar initiatives from other local authorities, albeit with the caveat that current the political and financial environment makes predicting the future more difficult than ever.

“I'm very lucky in being in a position where I've had support and the backing and the funding to be able to do this and I'm not sure that's readily available in many other places right now,” he says. “To get the political will, the financial backing and the operational proceedings all aligning to make this happen is a huge task - you need to have them all in place at the same time, together with the funding to make it happen.

“A lot of organisations would like to do this, but not many will. I think there will be more organisations of the Harrow/Barnet variety [where lawyers remain employed by the council, only acting through the ABS when regulation requires] emerging, and I expect the trend of erosion in in-house legal teams to reverse.

We're already seeing it in in-house environments in the commercial sector, where the number of in-house lawyers is growing as a proportion of the total population, and that's the common sense solution, to build up your own internal capacity.

“But I still think there's going to be a need for external support, organisations who can supplement that, and provide an alternative to the mainstream private sector, if I can put it that way.”

Finally, perhaps the obvious question for someone who has spent so much time and effort on commercialising local government legal practice from the inside – why hasn’t Geoff Wild just joined a law firm or another part of the private sector and made his fortune?

“I've worked in local government for 30 years,” he says. “I've had the opportunity to join a law firm in the past, but I joined local government for a very specific reason, and I have stayed in local government for a very specific reason, and that's because I've seen the benefits of deploying my legal skills for others, and seeing the real, tangible impact of that. And I know that's what drives and motivates 90%, I think, of the lawyers that come and work in local government, or eventually find their way into local government. They want to feel that what they are doing makes a difference to the lives of others.

“I've seen that you can do that from within local government, but you don't have necessarily to do it in a way which has always been done in local government. And that's what I've tried to do in my in-house role, is to reinvent my professional service in a way which is consistent with what happens in the private sector, but operates in an in-house environment.

“And what we're trying to do in Invicta Law is create a commercial organisation that retains that real focus on what difference we can make to our clients, and how we can really serve them better, and provide them with a service which we know is needed and to remove some of the barriers that prevent people accessing law now.”

Derek Bedlow is the publisher of Local Government Lawyer

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This article was first published in the July edition of Local Government Lawyer Insight, which can be accessed at http://www.localgovernmentlawyer.co.uk/insight

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