The business services giant Capita has applied for a licence to become an alternative business structure.

The business services giant Capita today announced its entry into the legal services market by declaring it had agreed to buy the English business of UK-wide law firm Optima Legal Services Limited, including its subsidiary Cost Advocates. It did not reveal the cost of the deal. 

Optima will become part of Capita Legal Services, a wholly-owned subsidiary of Capita plc, ’to provide regulated and non-regulated legal services for lender, insurance, government, legal, and corporate markets’, the company said. Capita has applied to be licensed as an alternative business structure by the Solicitors Regulation Authority. 

Optima Legal provides legal services for property transactions, debt recovery and litigation services. Cost Advocates provides legal costs drafting and negotiation services. It operates from offices in Bradford, Newcastle and London.  

In a statement released today, James Cowan (pictured), director of Capita Legal Services, said: ’Because of the way globalisation and the recession is driving the agenda towards efficient, effective and value for money services, clients require greater streamlined legal panels and more effective in-house legal teams. The proposed acquisition of Optima Legal will create a 600-person strong legal services team, with 150 legally qualified personnel and 50 solicitors, adding scale, depth and range to the legal services we are able to offer law firms, insurers, financial services companies and the wider corporate sector.’

Cowan told the Gazette that the venture would be aiming at corporate business, competing mainly with medium-sized firms. ’We’re not looking to compete at the ”Tesco law” end of the market,’ he said. Expansion plans will ‘certainly involve recruiting’, he said. Further acquisitions are also a possibility: ‘Capita has always been acquisitive, and it would be naive to think we can achieve our ambitions simply through organic growth.’

Philip Robinson, senior litigation partner at Optima, added: ’Capita’s ownership will allow us to accelerate our growth plans and build a stronger business and service proposition.’

Capita, set up in 1984 as a venture by the Chartered Institute of Public Finance and Accountancy and listed on the London Stock Exchange in 1991, turned over £3.35bn last year. It announced its first plans in the legal sector in 2011, setting up a legal process outsourcing centre in Krakow, Poland. The centre’s users include City firm Pinsent Masons. However the company’s most publicised venture in the legal world was its 2011 acquisition of the contract to supply courtroom interpreting services for the Ministry of Justice. 

Cowan, who has no legal professional qualifications, has been with Capita for a decade, managing outsourcing projects such as the London Congestion Charge and for the NHS. He said that he was confident he could deal with the challenges of running a law firm. ’Any professional services sector is going to have its foibles. I don’t think there’s anything insurmountable.’