Co-operative Group Legal Services (CLS) has seen its revenue decline by almost a third to £23m in 2014 from £33m in 2013 due to a drop in ‘personal injury income following regulatory changes to referral fees’.
According to the Co-operative Group’s 2014 full year results, its CLS business made an underlying operating loss of £5m in 2014, though that was down from £9m the previous year despite the diminished revenues.
The group did say the service had turned a small profit in the second half of the year following a restructuring, but that it still needed to ‘clearly define the future’ of the offering.
A statement published in its annual report today (9 April) said: ‘We believe that the legal services market remains fragmented, and many member and customer needs are not being effectively met. We are now looking to better define our approach to this market, as we build the business as part of the overall Group Rebuild programme.’
Revenue at Co-op Legal Services, which launched with great acclaim in 2009, slipped 28% from £18m to £13m last year over a 26-week period to 5 July. The fall in sales of probate and family law services pushed up the division’s losses, which stood at £3m for the corresponding period in 2013.
CLS, which is run out of Bristol, was one of the first businesses to receive alternative business structure (ABS) licence but was hit by the loss of Christina Blacklaws, who spearheaded its development, when she left to launch an ABS consultancy in 2014.
Meanwhile, in January Legal Business revealed that the Co-op’s general counsel Alistair Asher and head of legal Jim Tully are set to lead an assessment into the group’s panel firms as the 40-strong legal team undergoes an internal reorganisation. Understood not to be a formal review, the Co-op has worked closely with a wide range of firms including Allen & Overy, Addleshaw Goddard, Burges Salmon and Weightmans.
sarah.downey@legalease.co.uk