The mystery of LawVest - a closer look at DLA's ABS move

What is LawVest? It's a question I've been asking those behind it for a bit but the information they have released today has not made things a great deal clearer. They are keeping their model confidential for the time being, which is fair enough.

But getting a firm like DLA Piper on board, and particularly Sir Nigel Knowles - who knows a thing or two about taking something small and making it very big - is a statement of significant intent. The other people behind this venture are serious players too.

As an anonymous poster wrote on Legal Week's website yesterday, in response to the surprise news that former Linklaters managing partner Tony Angel had been named the firm's senior partner: "DLA is like lava flowing down a volcano - its competitors can see it moving towards them, inexorably and unstoppably, getting ever closer, but can do nothing about it."

What we know is that LawVest is targeting the business sector; it is no surprise to me that those who thought the Legal Services Act and alternative business structures were just about the consumer legal market are already being disabused of the notion. It is why I included a section on the needs and interests of SMEs during last week's Legal Futures conference (although LawVest's ambitions extend beyond just that section of the business community).

One also hears talk of big businesses looking to convert their in-house legal departments into ABSs and offering services to other companies, turning a cost centre into a profit centre, much like is already seen in local government.

What we also know is that DLA is not looking at this as a passive investment, but as potentially a way to service a section of its client base that will be less of a strategic focus as it continues its march around the world's legal centres.

Peppermint Technology's research into what clients want, released at our conference, showed that SMEs are less bothered than consumers about face-to-face advice as their matter progresses, with online and the telephone their preferred method of communication. This leads to the biggest hint of what LawVest is planning.

It comes not from the involvement of DLA, but of AdviserPlus, whose founder, Karl Chapman, has taken a step away from the business to become LawVest's chief executive. AdviserPlus has invested because "it is a natural extension of its service offering", the LawVest website says.

So, what is AdviserPlus? It provides a range of HR, employment law, and health and safety advisory services to organisations ranging from small companies to FTSE 100 businesses. It does so through a combination of "a proactive and pre-emptive service delivery model" (it says around 60% of call activity is outbound to users), "highly skilled advisers and practitioners who are dedicated to client accounts and operate in the name of the client", and a patented IT platform.

Essentially AdviserPlus sits between the line manager and the company's HR department, and all dealings that the line manager has with them, either online or on the phone, is in the name of the company. The "model was built from the line manager up, not the centre down" (LawVest has built its model "from the customer up") and is described as somewhere between insourcing and outsourcing.

It's not a sector with which I'm overly familiar, but I think embedding the service into the client in this way makes it different to other major employment law consultants out there like Peninsula and Croner. And as every employment lawyer knows, these consultancies have been busy trying to eat their dinner for some years now, operating in an area where much of the legal work is unreserved, as it is in business law generally.

It is pointless to speculate to what extent the plan is to replicate the AdviserPlus approach with LawVest. But we can say the promise to disrupt a market with a new proposition is far more easily said than achieved; in fairness Mr Chapman recognises this, which is why he says they will move "with pace and in scale". He adds: "Do not expect this to be a small business."

Mr Chapman is no stranger to building businesses; before AdviserPlus he set up CRT Group, a consultancy, recruitment and training business, growing it both organically and by acquisition to a market capitalisation of over £600m; in 1996 CRT sold 50.1% of its equity to American company Knowledge Universe for £109m. He left the business in 2000, setting up AdviserPlus a year later. When he describes the legal market as "the single biggest opportunity in my entire career", we should perhaps listen.

So could the time come when LawVest's brand (whatever that is - and thank goodness it will not be called LawVest) is actually in competition with DLA? Mr Chapman laughs. "If we ever get to that point, we'll both be delighted."

Neil Rose is editor of Legal Futures, a guide to conduct, compliance and competence for lawyers. Click here to follow Neil on Twitter.

• For more, see DLA Piper invests in new company targeting ABS market