Gallen: You’ve got to be quite brave
A pioneering alternative business structure (ABS) is set to become the first law firm to launch its own professional indemnity insurance product – for law firms, among others.
rradar is also planning to expand its operations through acquisition after it emerged that it took investment from a sovereign wealth fund two years ago, a legal market first.
The firm began in 2012 as an employment, taxation, health and safety and environmental law service, based in Hull, becoming an ABS in 2014. It describes itself as “a legal enterprise dedicated to helping businesses navigate business risk”, offering legal services, consultancy and training, as well as a 24-hour ’emergency crisis line’.
Its growth has gone very much unnoticed by the wider market – founder Gary Gallen, a solicitor, told Legal Futures that it has just under 300 staff working from seven offices across England and Scotland.
It has now launched an insurance vehicle, called rrelentless, headed by solicitor Matthew Williams, a well-known figure in legal expenses insurance from his days at AmTrust and more recently executive chair at City firm Runnymede Law
The first product is cyber insurance, backed by AXA, with a management liability product to follow by the end of the year and then professional indemnity insurance in early 2025.
Mr Gallen, who has just been named in the LDC Top 50 Most Ambitious Business Leaders 2024, said: “Law and insurance are in my view completely inextricably linked. By partnering with the insurance industry we’ve built a new kind of law firm.”
He said insurance policies were often very old-fashioned and had not kept up with Covid and working from home. He said rradar rewrote these policies.
“We have customers before we launch the products. We have a waiting list of people who want to buy them.”
As well as the insurance itself, lawyers could buy different levels of consultancy advice, on the grounds that prevention is better than cure.
“We want to help other law firms embrace smarter business models through consultancy. Lawyers are essential to a functioning society. We want to help ensure their practices are viable and well run to keep them away from insurance claims.”
Mr Gallen revealed that rradar received a “very substantial eight-figure investment” at the end of 2022 from sovereign wealth fund the Abu Dhabi Investment Authority and Madison Dearborn Partners, a large Chicago-based private equity fund.
However, since the value of rradar was “way over £100m”, they bought only a significant minority stake.
“We had got very big organically, recruiting staff and building up the business, but there were so many contracts and opportunities being offered to us that standard, organic growth was not fast enough.”
He said rradar has “up to 100 law firms” on its target list for acquisition and was currently working on the purchase of two niche law firms, which he hoped would complete early next year.
This follows the acquisition last Christmas of Backhouse Jones, which specialises in haulage and transport and had 65 solicitors and other staff. Again this was not announced to the market.
He said the fact the law firm was a leader in the trucks cartel litigation was a factor leading to the deal. Backhouse Jones represents the Road Haulage Association under a collective proceedings order, along with national firm Addleshaw Goddard.
Mr Gallen said the litigation showed the firm’s credentials. “They were given the [order] when all the big firms wanted it. The court recognised that their knowledge and expertise was so great that it would make more sense for a specialist law firm to get it. Size did not matter.”
Referring to the “sweat, risk and stubbornness” that he spoke about six years ago at a Legal Futures conference, he added: “We’re the first law firm to have its own insurance company, the first to be financed by a sovereign wealth fund.
“That’s where the stubbornness comes from. There is no roadmap for it. You’ve got to be quite brave. Lawyers don’t like to take risks.”
Among the firm’s services are an intelligent legal assistant app called rradargrace, which was launched in 2017 in association with AXA, a subscription-based online knowledge library, and a risk analysis tool.
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