The shift that BT Law took is not a big shift. We went from offering certain services to our internal client to offering the same services to other, external clients.
BT Law Ltd. is a wholly owned BT group company. Acquiring ABS status in March, 2013, BT Law draws upon the expertise and resources of its in-house legal department to provide legal and claims handling services to external corporate clients, in the areas of motor claims, public liability, employers’ liability and employment law. Archana Makol is both Director of BT Law and Chief Counsel at BT.
BT has a large in-house legal department — about 450 people worldwide — a number that includes lawyers and nonlawyers. BT is unusual in how it has chosen to manage its casualty property and employment law risks. Most companies outsource some or all of these — BT does not.
Just under 20 years ago BT began collecting all its volume claims handling work into one location. There was no need for that location to be in a high-cost hub like London, so Sheffield, a town in northern England was chosen. Initially the focus was on handling BT’s own property damage claim work: how can we develop a process and technology for it? How can we be sure that we claim the monies owed to us rather than let it leak through poor processes? Over a period of 10 years, we enlarged the scope of that work to include third party claims to the business, employee injury claims, and eventually motor vehicle claims. BT was not completely happy with the service it was receiving from external service providers, and so it brought all of that work in-house. At the same time, our employment law team was developing its practice based in the Midlands and London.
When an in-house department builds this kind of service, it does not do it with profit in mind. It builds it on the basis that everyone wants more for less, so you must be efficient, you must have well-managed work flows and you must understand the data and trends.
The brand of our business is critical. Regardless of whether a claim is big or small, the people handling the claim are the face of the business, and they need to take care. This does not mean an open checkbook — to the contrary. It means handling each claim with the bigger picture in mind. It means being firm, but also decent and polite, it means taking a customer service approach, it means keeping a lookout for fraudulent claims. Those are not things that our external service providers — including some external lawyers — necessarily did, or did well.
By about 2010 we had it all pretty much in place. Our internal clients were extremely happy with our service having decided to bring some outsourced elements back in.
Even though the Legal Services Act was not adopted until 2007, we had known for some time that changes were afoot. Indeed, we, as an in-house team, had been approached a few times and asked to act for other companies. At the end of a case, some opponents had come to us and asked, “Would you do that for us next time?” I believe they saw that we handled claims in a clean and fair manner, and that we did what we said we would do, when we said we would do it.
It was flattering to be asked but of course we couldn’t represent them. As in-house counsel, we could only act on behalf of our employer.
But it got us thinking. We started to improve our processes even further, with the possibility of one day offering it to external clients. There are ways you can work in-house that need to be refined for external clients. For example, we reviewed how we managed money, our business continuity plans, and our IT. It was quite a wait from 2007 when the Legal Services Act was passed until 2012 when the first ABSs were authorized. That gave us time to get our act together.
What has been key for us has been the ability to offer a genuine cradle to grave service to all of our clients, in-house and external. We aim to have the same person handle a claim from the time the incident occurs right up to the Court of Appeal if necessary. This is more efficient than having a claim change hands at several points as it progresses, and it gives our team the ability to track trends. In order to be able to offer this to others as a legal service including litigation, we needed an ABS license.
BT Law is operated under a secondment model. BT Law does not have any of its own employees — all its work is carried out by BT Legal (BT plc) employees and using the resources of BT Legal. It is a complex model, but it provides us with a lot of flexibility. It allows us to take a more credible and cautious approach.
We want to work for businesses who share our values. Notably, we want to work for businesses who understand the importance of brand and the wider ramifications of their claims handling practice, and who also need to bring their costs down. When a client comes to us, they get the benefits of an in-house team without having to build an in-house team. We have a real understanding of brand and of business process. Because of that understanding, we handle cases differently than many other practices would.
BT Law has a number of clients, especially with respect to motor claims and employment. Most of our clients are large companies that generate many claims. Our clients include companies like Network Rail and EDF Energy. We are open to working with smaller companies, and our employment law team does. Typically they do not generate enough volume to need a specialized, full service like ours, but they can benefit from our existing scale.
Our technology and our work flow system enable us to address claims quickly. We collect information from a variety of different sources. Speed is of the essence, and our process helps us to collect and filter information quickly, which enables us to analyze and react to cases quickly. We are able to allocate and act within hours if not minutes of an incident occurring. This can save the business a lot of money, and also protect its reputation.
The quickest we’ve been able to react and offer help to someone who was the victim of an accident is 23 minutes. This can be done only with a good work flow system. Our system is IT based. Imagine a series of flow charts: If A happens, do B, if C happens, do D. In this way, our IT flags what needs to be done, and diarizes it.
We enable our case holders, who are typically not lawyers, to handle as much as they can. In our volume case handling team of 60 people, only eight of us are qualified lawyers. For issues that come up frequently, you do not need to have lawyers; you just need to have the right processes and good lawyer supervision.
We ring fence the work we do for non-BT clients, to ensure we comply with our regulation and keep their information confidential. Client money is handled separately in accordance with the rules. At times a lawyer wears the hat of a BT Legal lawyer and at other times the hat of a BT Law lawyer. At first I thought it would be a nightmare to organize, but in fact it has been quite easy and seamless. We think it has worked so well because BT has always been highly regulated, so adding an additional level of regulation was not a big leap.
We have a conflict of interest process in place, and of course our IT system helps us to identify conflicts. It’s not any different for BT Law than it is for any other business.
Potential clients often ask us how we handle workflows when demands are high: Do we prioritize the work of BT or the work of our clients? We prioritize as needed, in the same way as any professional service provider would, and our business understands that we need to do that.
A problematic conflict for us is when our vehicle has an accident with a client’s vehicle. For occurrences like those we have a system in place where we refer claims elsewhere — we would never for two sides in a conflict and that may mean referring a BT Claim. We have the support of the business on this — they understand.
We are still quite small in the big picture of BT. Our key sponsor is BT’s General Counsel. He is highly supportive of BT Law — he is proud of what we do and how we have done it. Other key supporters within BT are the head of insurance and risk and the head of health and safety.
It is still early days for us. We are no longer seen as just a cost center for BT. At the moment, we seek to offer cost neutrality, and we are moving towards becoming a profit center.
The shift that BT Law took is not a big shift. We went from offering certain services to our internal client to offering the same services to other, external clients. It is not the same thing as a brand new structure offering a brand new service.
Predictions of doom to the legal profession because of the adoption of alternative structures are too simplistic. What is the real fear? What is the real concern? Other business propositions in the market, not just traditional law firms, are no bad thing. We are still part of the legal profession and proud to be so.
The law is a great profession, but it is not great at all things. I work for a company that is very good at diversity and corporate responsibility. In my experience these are not the kind of things that traditional law firms always do well. The idea that these alternative businesses will come in and ruin the world is not looking at the bigger picture. And it makes a lot of assumptions that traditional legal practices are the best kind of businesses for all legal services. Actually, if you have a structure where a large number of people need to agree on everything, it can be a very slow business to evolve.
In many legal practices, there are many elements of the work that can be done differently, and do not need to be done by lawyers. Because legal businesses have been owned only by lawyers for so long, innovation has not always been what it could be. Lawyers are great at being lawyers, but are we great at managing businesses and at customer service? Are there other skills that could be brought in that can improve the service we provide to our clients? This does not detract from the professionalism of law. There is room to grow and change. There isn’t any end to where it can go, but you need to have vision.
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