Legal services market reforms are being blamed for job losses at Bolton-based UK top 60 insurance firm Keoghs, which has put 41 people at risk of redundancy including fee earners and support staff.
The redundancies will mainly affect the firm’s Coventry office and particularly its counter-fraud services (CFS) division, as it looks to consolidate its offering for low-value fraud work in the North West.
Last year, the Legal Aid, Sentencing and Punishment of Offenders Act banished referral fees for personal injury claims and a spokesman for Keoghs said: ‘The post-reforms market environment has yet to stabilise but it is clear that insurers’ ongoing counter-fraud requirements are going to be significantly different to what they were 12 to 18 months ago.It is regrettable that we have to lose colleagues from our business. However, the restructure we are undertaking within our CFS division will give us the agility needed to respond cost effectively and continue to thrive in a rapidly changing market.’
The move comes after the 275-lawyer firm recorded an 18% increase in revenue in the last financial year to £55.5m. It converted to an alternative business structure in 2012 and in November received a cash injection from private equity house LDC, part of the Lloyds Banking Group, which took a 22.5% stake in the business.
Keoghs said in a statement that it will remain the ‘largest provider of counter-fraud services to the general insurance market,’ and is currently looking to fill 51 vacancies across the business.
Last year the firm, which recently won a place on the Allianz Insurance legal panel, bolstered its Manchester office with the hire of three Clyde & Co partners, Estelle Machell, Mike Pope and Anthony Mangham.
david.stevenson@legalease.co.uk