GLENDALE, Calif.–(BUSINESS WIRE)–LegalZoom Legal Services Ltd („LegalZoom UK“), the UK arm of America`s leading legal brand, today announced an agreement to acquire Beaumont Legal, an award-winning law firm based in Wakefield, Yorkshire. The acquisition is expected by the end of the year, subject to regulatory approval. Beaumont Legal is considered one of the fastest growing law firms in the UK and currently provides a range of legal services to individuals and businesses. In recent years, Beaumont Legal has become one of the leading providers of property transfers in the UK. LegalZoom uses ABS to circumvent the U.S. ban on hiring lawyers 8. June 2021 Nasdaq: $100 million listing proposal US legal services giant LegalZoom is circumventing the national ban on non-legal firms by letting its UK alternative business structure (ABS) employ US lawyers. The details came in a registration statement filed with the U.S. Securities & Exchange Commission ahead of a planned $100 million (£70 million) listing on the Nasdaq Stock Exchange in New York. The statement also revealed that LegalZoom sold its Yorkshire-based property transfer business last year because it fell short of expectations. LegalZoom, which claims to be the best-known legal brand in America, reported revenue of $471 million in 2020 with an EBITDA margin of 19%. UK financial data is not separated, but according to accounts filed with Companies House by its UK holding company, LegalZoom International Holdings Ltd made a gross profit of £5.9 million in 2019 on a turnover of £14.9 million, but this resulted in a total loss of £3.2 million after administrative expenses.
However, that was before Wakefield-based law firm Beaumont Legal was sold to consolidator Metamorph Law in April 2020. LegalZoom is not a law firm in the US and the strict rules for Unauthorized Practice of Law (UPL) – which have no equivalent in the UK – mean it cannot employ lawyers to provide direct legal advice to its clients. Non-lawyers were not allowed to own law firms in the United States, even though Arizona became the first state to open up to ABSs this year. LegalZoom became the first US company to receive an ABS license in 2015 and acquired Beaumont Legal later that year for £6.4 million. Although it sold Beaumont last year, it still owns an ABS called Pulse Global Services (also known as Pulse Law and LegalZoom Legal Services), which describes itself as a „law firm and product development agency“ based in London and Austin, Texas, where LegalZoom`s operational headquarters are located. According to SEC filings, „ABS employs both U.K.-licensed lawyers and U.S. attorneys to provide limited legal services to consumers who purchase such services on our websites.“ They continued: „ABS is regulated by the Solicitors Regulation Authority (SRA). Although we believe this structure is legally permitted, it is generally not tested in US courts and we cannot guarantee that it will protect us against claims by CPL [Corporate Practice of Law] or UPL. „The terms of use of its subscriptions legally for individuals and businesses state that the provider is Pulse Global Services; The client relationship is governed by a limited scope representation agreement, which gives Pulse the right to subcontract to attorneys in the United States. A spokesperson for LegalZoom said it could not comment on the agreements because it was in a „dormant IPO.“ The SEC statement also stated that the SRA must approve any owner of an ABS who holds an interest of 10% or more. „If a shareholder wishes to consider holding an interest in our common shares above this threshold, it is possible that the SRA will be approached and obtain prior approval prior to such an acquisition,“ he said.
`The SRA may compel any person who acquires a limited shareholding, contrary to the applicable rules, to divest its shareholding in the authorised entity (or its parent company). The SRA also has the possibility to suspend or revoke the status of the entity concerned as an authorised entity in respect of such a breach. „Any suspension or revocation of the status of our UK subsidiary as an authorised entity would have a serious adverse effect on our business and, in such circumstances, we would seek to work with the SRA to minimise any resulting business disruption.“ On Beaumont, SEC filings reported a „continued decline in business performance“ in 2019, and LegalZoom ultimately paid Metamorph $1.2 million in working capital and recorded a $1.8m loss on the sale of the company. The statement continues: „In 2019, we had two reporting units, the US reporting unit and the UK reporting unit. The performance of our reporting unit in the UK was below expectations and deteriorated further in 2019. „Our quantitative assessment of goodwill in 2019 concluded that the carrying amount of the UK reporting entity exceeded its fair value and, as a result, we have written down all goodwill attributable to the UK reporting entity by US$10.6 million.“ There is now only one reporting unit. LegalZoom also stopped providing process services in the UK in 2019. In 2019 and 2020, the company also committed severance packages of $2.2 million „related to a reduction in the workforce of our UK workforce“. In 2020, 10% of all new limited liability companies and 5% of all new companies in the United States were incorporated through LegalZoom. Since the sale of Beaumont, the British location has mainly offered services and wills. We recently used Dharmy, Amrit and Tracey to sell and buy and I can honestly say the experience was perfect.
Regular updates and communication, but most importantly excellent customer service. Thank you for making the transaction enjoyable and transparent. I highly recommend this company to anyone looking for a property transfer lawyer, Paul & Stephanie Parnell Dharmy, Rachel, Emma and all the lovely people in the fantastic Dharmy team are absolutely fabulous!! I highly recommend them to anyone looking for a transfer of ownership. Throughout the process, they were extremely proactive and responded to emails/calls and made our home buying experience very positive!! Many thanks!!! Damaride Martini is an honor for your company. We were given a deadline for our mortgage and purchase, Damaride took care of the transfer of the mortgage and was incredibly efficient and proactive. I was kept informed throughout the process, as Damaride regularly briefed us and his colleague Dominic Stait, who handled the buyout, to make sure we could respond with paperwork to avoid delays. They were a dream team. I felt like I was their only customer. Fantastic service on all levels. Beaumont Legal, recognized for its transmission practice, currently employs more than 150 people. Managing Partner Nick Masheder plans to hire more „innovative, forward-looking people who want to be part of something really special.“ I was very satisfied with the service provided by Legal Zoom. They handled the transfer of an estate sale of a property that had belonged to a family member.
I felt they were professional, efficient, helpful and timely and felt that the deal was in good hands and internet security was good. This is the fourth time our large family has used this company. The statement also revealed that LegalZoom sold its Yorkshire-based property transfer business last year due to poor performance. „Any suspension or revocation of the status of our UK subsidiary as an authorised entity would have a serious adverse effect on our business and, in such circumstances, we would seek to work with the SRA to minimise any resulting business disruption.“ Although Beaumont was sold last year, it still has an ABS called Pulse Global Services (also known as Pulse Law and LegalZoom Legal Services), which describes itself as a „law firm and product development agency“ based in London and Austin, Texas, where LegalZoom`s operational headquarters are located. Businesses can request reviews via automatic invitations. The term Verified refers to real experiences. Learn more about other types of reviews. Access CommunicationsDanielle Mandragona, 914-826-5215dmandragona@accesspr.com LegalZoom, which claims to be the best-known legal brand in America, reported revenue of $471 million in 2020 with an EBITDA margin of 19%.