What we are most excited about with the ABS structure is the possibility to offer to our staff a stake in the business...We believe that this is a very important way to inspire and motivate our employees,
Triton Global integrates insurance claims administration, legal defense and representation, and claim investigation and adjusting for professional indemnity insurers and policyholders. As an ABS, Triton Global was the first legal services provider to offer employee share ownership, and to become a member of the UK Employee Ownership Association.
We have a very specialized client base. We provide insurance-based claims services for the policy holders of insurers, predominantly in the area of professional liability insurance.
In the UK, we offer to our insurer clients a “one-stop-shop” for handling their claims work: legal, claims management and loss adjustment. We have also been able to create a team to provide world-wide audit and inspection services for our insurance client base. Before the Legal Services Act, those services had to be offered separately, through different entities. Now we have lawyers, loss adjusters and insurance professionals all working together to produce a single integrated product
We thought that it’s nonsense for insurers to buy three lots of services. Why can’t they, if they want to, get all their claims management services from one place? Our clients love it — they like the fact that they can come to the same place for their claims defense work, and that they can negotiate to have it all handled for one, predictable fixed price over a long term basis. With us, insurers no longer feel like they are writing blank checks to have their claims management work done. Insurers no longer have to hope that the cost of defending claims will not exceed the amount of the premiums they collect.
When the Clementi Report came out, we were very excited, as we immediately saw the possibilities. We waited patiently until it was possible to make an application to become an ABS.
In creating the ABS, we have become something very different than we were before. We pooled the three existing businesses, including the law firm, into one company, and eliminated the partnership structure in favor of a corporate structure, with a Chief Executive. I was nervous about it — I’d been self-employed for over 40 years and then I became an employee. For our lawyers, we decided to keep the title of Partner because that is what the market, and notably the law firms we service as policyholders, recognizes as what the most important lawyers are called.
What we are most excited about with the ABS structure is the possibility to offer to our staff a stake in the business. Before ABSs, only lawyers could have ownership of a law firm. With an ABS, we can offer share ownership to all of our staff, not just the lawyers. We believe that this is a very important way to inspire and motivate our employees, and research shows that it results in significant improvement in employee productivity and retention. We’ve even become a member of the Employee Ownership Association. Another reason to be happy about this is — what do you do when you retire? Law firm partners don’t have anything to sell when they retire — with an ABS, you have something you can sell.
One of our shareholders is the Trust Company (it holds shares for the employees before they vest in them individually). In this, we have a ready-made vehicle for purchasing shares of those who want to downsize their holdings. One of the things that we have done this year is to encourage some of the senior shareholders to offer some of their shares for sale, so that they gradually reduce their holding. These shares are promptly bought by the Trust on behalf of newer employees. In this way we are ensuring a ready (and active) market in our shares whilst keeping the ownership still within the business.
Another benefit of becoming an ABS is that it permits us to demonstrate to clients that we are a well-managed, stable business, that we can make decisions faster than a traditional law firm, and that we are not held hostage to a handful of prima donnas. Our clients have responded very favorably to this — some have asked us why we did not do it sooner.
Our clients are major, global players. We have deployed on a global basis a claims management system that permits the viewing of claims in real time. We’d like to be able combine our businesses in other countries the way we’ve done in the UK, and notably we’d like to do it in the US, but so far we’ve not been able to. Australia seems more likely at the moment, as their rules are similar to the UK’s and we are also looking at what might be possible in Canada, Singapore and the Republic of Ireland.
For the future, we see the form of ABS as a growth mechanism for us. It will permit us to bring in external investors (if we wish to), to expand our overseas operations, and to attract like-minded, progressive thinking lawyers and insurance professionals.
The legal profession, not just in the UK but everywhere, is facing problems that are two faces of the same coin: declining profitability and a large number of law graduates who cannot find jobs. The ABS model offers a way to address those problems. And the days of amateur management are over.
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