The legal landscape for general counsel (GCs) in the United Kingdom is undergoing significant challenges and transformations in 2024. A comprehensive survey conducted by Wakefield Research and commissioned by Axiom provides crucial insights into the current state of in-house legal departments, shedding light on budget constraints, talent management issues, and the quest for innovative solutions.
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Following their appointment as joint administrators for Ince on 28 April 2023, Andrew Hosking and Sean Bucknall of Quantuma Advisory have filed a statement of administrator’s proposal (the Quantuma proposal) at Companies House.
A pre-pack sale of Ince’s business and assets to Axiom Ince has now been completed. The Quantuma proposal states: ‘Of the total sale consideration of £2,200,000, £1,000,000 has been received to date and the remaining £1,200,000 will be collected as and when it falls due for payment.’
Ince owes secured creditors a total of £16,854,792 in banking debt at the date of the appointment of the joint administrators. This includes an estimated £15,000,000 debt owed to Investec Bank.
The firm does not have any preferential creditors. All its employers were TUPE transferred to Axiom Ince and there are therefore no preferential claims.
However, HMRC is a secondary preferential creditor and is expected to make a claim of around £15m. This includes liabilities for VAT, PAYE income tax, employees’ NIC, CIS deductions and student loan deductions. A Compass Evaluator report filed with the Quantuma proposal and commissioned by Tony Mead, a director at Axiom Ince, detailed the challenges faced by the beleaguered firm. It notes that while Ince had been hoping to find a solvent trade on solution, its considerable arrears with HMRC have proved challenging.
The directors of Ince had sought a time to pay agreement for the arrears to avoid administration but this was rejected by HRMC. ‘Enforcement action is imminent,’ according to the report. Additionally, the report highlights that the audited accounts for the year ended 31 March 2022 are outstanding and ‘the shares have been suspended since 3 January 2023.’.
The total owed to creditors amounts to £41,188,082.40. The firm has accumulated a wide range of creditors during its troubles, including individuals, universities, law firms, and The Law Society.
The Quantuma proposal states ‘it is anticipated that there will be insufficient funds to pay a distribution to secondary preferential creditors in full or the unsecured creditors.’
To conclude the administration the remaining deferred consideration from the purchaser, amounting to £1,200,000, needs to be collected. The joint administrators will also need to discharge their statutory duty to investigate the affairs of Ince. The Quantuma Proposal states: ‘the administration is expected to conclude in c.30 months by exiting to dissolution.’
‘Very much business as usual,’ Samantha Palmer replied when asked about Ince & Co’s future following its acquisition by Axiom. Palmer, a finance and projects partner at Pinsent Masons, is the appointed solicitor manager for Ince’s administration and is overseeing all regulatory aspects of the acquisition.
The sale was completed on 28 April, just over two weeks after the Ince Group, the listed parent company of Ince, was placed into administration following a tumultuous year.
Pinsents has advised Ince throughout the administration process. ‘The senior management team [Ince] reached out as part of the wider financial assurance offering when the firm was encountering financial difficulties,’ said Palmer. Her colleague, restructuring partner Steven Cottee, and his team provided restructuring advice to the joint administrators, Andrew Hosking and Sean Bucknall of Quantuma Advisory, following the administration.
In her role as solicitor manager, an SRA approved role, Palmer said that: ‘The key thing is to provide and ensure the safe and secure transfer of client files with informed client consents, valuable client documents and obviously client monies across to Axiom.’
Given the highly public nature of the collapse, communicating to existing clients throughout the acquisition was key. Palmer and her team are manning a specific email account that Ince clients can contact 24/7 if they have any queries or anxieties. Palmer explained: ‘No client was left behind and no client’s interests were prejudiced. There were a lot of communications from the firm that was Ince Gordon Dadds LLP out to clients in advance of the transaction and then immediately afterwards. Everybody was migrated securely and safely across to Axiom Ince.’
Following the acquisition, Ince fee earners can return to progressing live client matters.
As well as ensuring the smooth transfer of client matters, the acquisition has safeguarded jobs. All remaining partners and staff, including fee earners, business services staff, and support staff have transferred to Axiom Ince. Palmer confirmed: ‘All the salaries were paid and the drawings were paid up till the end of April. So, there were no redundancies caused by the transaction.’
Following the acquisition Ince will operate as a separate entity of Axiom. As such, it will be managed independently as a separately branded legal services business. Donald Brown remains CEO and Jennette Newman will continue as managing partner.
In a press release, Ince referred to the transaction as ‘partner-driven’. Client Q&As, available on the Ince website, state: ‘The new structure and ethos came out of widespread partner expressions of concern and dissatisfaction with the old model, which was not supporting the law firm, its clients, their teams, or the culture in which they wanted to practice.’
The client Q&As further claim: ‘This is an opportunity for us to reinforce the firm’s core focus as a highly respected legal business, without the noise and distractions of the corporate structure.’
Despite the separation of Ince as a legal entity, Axiom, formerly Axiom DWFM, has changed its company name to Axiom Ince. The name change was registered at Companies House on 5 May, shortly after the acquisition was completed.
Axiom is a full-service law firm, with offices in London, Bristol, Swindon, and Birmingham. In 2021, Axiom Stone and DWFM Beckham merged to form Axiom DWFM. The firm is ranked in tier 5 in Commercial Litigation: Mid-Market, Family, and Property Litigation in the latest Legal 500 UK guide. Its residential property practice is included in the Legal 500’s Firms To Watch.
Its practices include corporate and commercial, employment, dispute resolution, media, family and private client. Although, much like Gordon Dadds before it, it does not have a dedicated shipping practice.
Ince, however, is keen to draw a distinction between the 2019 administration and the present administration. Its client Q&As state succinctly: ‘That is a matter for those involved at the time.’
While time will tell if Ince is truly in calmer waters, the acquisition means that for now job losses have been avoided and client matters have been safely handed over to its new iteration. The challenge for Ince, in this new ‘partner-driven’ model, will be to rebuild its brand reputation and develop a firmer grip on the firm’s governance to avoid repeating past mistakes.
holly.mckechnie@legalease.co.uk
Industry pioneers are attracting public and private interest in alternative models
While many lofty predictions of New Law’s rise remain unrealised, the market’s traditional champions have all made major contributions to its growth in recent weeks. Flexible lawyering business Axiom engaged in a surprise private equity (PE) sale; US alternative provider UnitedLex turned over $350m in an impressive year; while Elevate achieved revenues of £76m in another record result.
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Axiom making good on long-trailed plans to float will be a milestone for New Law. Thomas Alan assesses if the trailblazer can live up to its own rhetoric
When Axiom announced in February its intentions to float, it was a seminal moment for New Law, with the pioneering flexible lawyering company established as the most prominent global brand in the sector. Back in 2013 one excited commentator forecast 2018 as the year Axiom would become the world’s largest legal provider (spoiler alert, it still wouldn’t make the Global 100).
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New Law pioneer Axiom is to make good on long-mooted plans to float in a potential milestone for the alternative law sector. Axiom announced today (19 February) that it has submitted a draft registration document for a proposed initial public offering (IPO) with the US Securities and Exchange Commission (SEC).
The prospects of a public offering for the US-based trailblazer – regarded by many as the most prominent New Law brand in the world – is a symbolic development for the legal industry, potentially providing a bellwether for the fast-growing alt law market.
The company was founded in 2000, originally on the model of offering high calibre legal ‘locums’, growing to reported revenue of $360m in the 2017/18 financial year. The company has more than 2,000 employees across three continents.
It is the latest in a long line of New Law firms to seek external investment, though the US-bred Axiom had long been expected to float rather than seek a trade buyer. An IPO would follow competitor UnitedLex securing a $500m war chest after private equity house CVC Capital Partners acquired a majority stake in the business in September, and on a smaller scale, Lawyers On Demand’s sale to Bowmark Capital in May.
It also follows a number of UK legal floats in recent years, most recently top-25 UK law firm DWF, which plans to raise £75m on the London Stock Exchange next month.
The benefits of floating traditional law firms have long been debated, but New Law businesses such as Axiom have typically been seen as more compelling investments, particularly as technology and automation turn more of institutional legal services into scalable process.
Axiom also spun off two of its companies today, Knowable and Axiom Managed Solutions, which provide enterprise contracts intelligence and solutions for complex legal work respectively.
AMS chief revenue officer Chris DeConti (pictured) commented: ‘Both Knowable and AMS require and deserve the sharpness of focus, capital, and leadership energy that come with being independent growth companies. Independence will also allow us to seize unique opportunities and better serve clients, with an efficiency of focus, dedicated management teams, and tailored investment strategies.’
Few doubt that the success (or failure) of Axiom’s public offering will be a significant moment for the legal industry on a global level.
Marking the 365-day countdown to Brexit, alternative legal services provider Axiom has today (29 March) launched a purpose-built service to aid companies revise millions of financial services contracts as the pressure to update paperwork increases with the UK’s exit from the EU looming.
Designed specifically for in-house legal teams, the service, named ‘BrexitBridge’, will incorporate artificial intelligence (AI) to help companies update and rewrite their contracts they begin one of the largest contract-renewal endeavours ever undertaken.
Axiom estimates that financial services companies spanning the UK and EU will need to revise more than 7.5 million contracts due to Brexit. Over 100 types of contract would be involved, with numerous European regulations and domestic laws needed to be taken into account as companies made their changes.The newplatform will seek to use data aggregation tools to organise existing contracts into information packages and convert contract text into structured data.
Chris DeConti – executive vice-president of global solutions at Axiom – said: ‘With a year to go until Brexit, companies need to get their contracts ready now. In practice, this means repapering massive volumes of contracts of all types to ensure continuity. ’
In Axiom’s BrexitBridge guide, the firm suggests all financial products and services sold cross-border will be affected, placing strains on traditional approaches to contract revision. Axiom has pedigree in contracting support, as in 2016 the firm signed a five-year contract with consumer giant Johnson & Johnson to support the company’s global procurement contracting function.
However the platform may have significance beyond Brexit, as the cost and complexity of contract revision becomes untenable. DeConti told Legal Business: ‘This sort of work will become more tech-enabled for some time to come’.
thomas.alan@legalbusiness.co.uk
A warm congratulations to all of the nominees at the Legal Business Awards and especially to those of you who have made the GC Powerlist. We’re delighted to sponsor such a prestigious awards ceremony as well as celebrate top UK GCs.
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Consumer and pharmaceutical goods giant Johnson & Johnson has entered into a five-year deal with Axiom to support the company’s global procurement contracting function.
This increases Axiom’s life sciences portfolio, which currently serves 22 of the top 25 global pharmaceutical, biotech and medical device companies, including nine of the top ten. Overall, Axiom has 2,000 lawyers and other professionals working for half of the Fortune 100 across 15 regions.
Axion will be responsible for thousands of procurement agreements in more than 10 different languages, across a dozen contract types for Johnson & Johnson, through a team of negotiators and subject matter experts, as well as a team of lawyers who will provide ‘white glove service’ for more complex agreements.
Most of Axiom’s work for Johnson & Johnson will come from its office in Wroclaw, Poland which opened in late 2014. Axiom’s Chicago office will also serve as a ‘front-door’ same time zone support for North America.
Axiom executive vice president Al Giles (pictured) said: ‘we are pleased by what this deal represents for contracting in the life sciences industry: the progression from an artisanal approach to a model that applies standardisation, automation and process.’
‘That approach not only creates a more efficient contracting function, but it also has commercial benefits – shortening cycle times and better managing risk’, he added.
In 2014, BT selected Axiom for its global legal outsourcing and analytics for a three-year contract, with Axiom contracted to undertake 30-50 instructions per day across Europe, US/Canada and APAC, from simple work such as non-disclosure agreements and first mark-ups of contracts during requests for proposals, to more sophisticated work like end-to-end negotiations of master service agreements and product and service agreements.
Axiom supports BT from its European headquarters in London and international centres in Belfast, Gurgaon and Houston, giving the telecoms giant commercial and administrative support for 20 hours a day.
georgiana.tudor@legalease.co.uk
Big Four accountant Ernst & Young (EY) has appointed Axiom’s Aaron Stewart as a director to head up the launch of a legal services arm in Belfast.
According to EY, Stewart will be working with the accountant’s clients across the UK and will also be responsible for building and running a team in Belfast.
Commenting on the launch, Philip Goodstone, EY’s head of law in the UK said: ‘As we continue to grow our legal services team, we remain focussed on finding the best talent, regardless of geographical location. Aaron brings a wealth of experience to the role and will be a real asset to our clients across the UK.’
The move to expand the legal services team across the UK comes after the accountancy giant was granted an alternative business structure (ABS) licence by the Solicitors Regulation Authority in December 2014 in a bid to provide ‘integrated, multidisciplinary’ legal services across England and Wales.
Headed up by Addleshaw Goddard’s former corporate head Goodstone and Matthew Kellet who was recruited from Berwin Leighton Paisner, EY’s UK law practice has grown to a team of 40 since the firm received the licence with former Olswang employment head Daniel Aherne in charge of building and leading the employment law team.
EY’s global law practice has 1500 legal professionals in 67 countries with legal teams in Mexico, Costa Rica, Singapore, China, Vietnam, Australia and New Zealand. Its core legal services are corporate commercial, employment, financial services and M&A/transactions.
Kathryn.mccann@legalease.co.uk
