Sorry to raise this as Scotland’s vote on independence nears. But BQ wants to share with you the experiences of Jeff Winn, whose entrepreneurial flair (rare among lawyers) has led Winn Group, within 12 years, from start-up to highest echelon in securing fair settlements for innocent victims of road traffic accidents.
From unpretentious headquarters in a converted supermarket beside Byker Metro station, this remarkable Newcastle one-stop shop in traffic accident management (TAM) has grown turnover to £45m and its workforce to 300, 37 of them lawyers and about half the total having some legal background.
It removes or eases drivers’ stress by taking care of every aspect of a claim – including compensation, temporary vehicle replacement, medical services and professional advice - on a “no win, no fee” basis. Clients calling them rather than their insurers, Winn Group says, avoid losing their no claims bonus, perhaps even a jump in their premiums.
Group turnover up 30% yearly, revenues of £393,000 per lawyer, and profit per equity partner outstrip performances of many law firms in London and Manchester. Jeff Winn has disproved well intentioned Jonahs who advised he was risking a successful career by focusing wholly on litigation often notoriously laggardly.
One case Winn was involved in was adjourned for five years, the judge wishing to deal with all elements together after the client’s full recovery. The group shouldered the costs meanwhile. But its template didn’t charm lending banks. No win, no fee cases require extensive credit. Fees, vehicle hires and medical costs are reimbursed by eventual successful recovery from the other party’s insurers.
Banks, however, want assurances about dates of repayment which, in litigation, can’t always be given. One banker said: “Look, Jeff, yours is a new idea. New ideas work well in London. But you’ll not find support in the North East.”
That jarred with Winn, who’d just returned to the North East from a successful legal career there. “I mean, to return here then find that to do anything entrepreneurial you must get yourself back to London. But I think bank attitudes have changed now,” he suggests.
For 10 years, though, profits had to be reinvested heavily, and drawings from the business kept modest. But there’s been a chuckle along the way. “One banker thought my five year projections ridiculous. Yet I was actually 5 or 10% ahead of those when the five years ended.”
There’s no hilarity, however, when a sketch is outlined of North East initiative and innovation being disadvantaged both from London and Scotland. Winn tells: “We had an opportunity to bring 2,000 more jobs to the North East. I’d have loved that. It involved a start-up two private equity investors planned. In Glasgow they were offered a £10,000 a job grant - £20m of start-up costs.
“They’d done their sums assuming the North East could offer similar. Though I spoke to the city council here and others no grants were to be had. The investors couldn’t see why, when Glasgow offered £10,000 a job they’d get nothing if creating the jobs in the North East, whose unemployment rate was higher.”
The North East’s regional development agency was being run down then. “In the end, the entrepreneurs considered nothing from the North East was too risky despite their commitment, especially since regulatory changes were imminent. They didn’t go ahead in Glasgow either because it was our legal processing abilities they wanted.
“You get political rhetoric about helping the North East. It was disappointing. Many jobs go north of the border because it’s not a fair fight. Why should Scotland with less unemployment get £10,000 a job and the North East nothing?”
The market gap was filled – by a London company. Adding to Winn’s irony, Tesco got a grant to locate a national headquarters on Tyneside for its home and motor insurance bank with 1,000 jobs – half what Winn had envisaged. “Tesco are national. If you were an entrepreneur in the North East it seemed nothing was available,” he reflects.
“Simplified grant rules ensuring jobs are created as promised would help the North East. Presently it’s Mickey Mouse bits and pieces. I guess some people go round the back through the London lobby, or through friends of X and Y and Z and get a leeway.
“About 10 years ago we did get an innovation grant of about £125,000. It cost us about £70,000 in accountancy fees to comply with all the hoops, then admin costs on top. Even then we’d been refused the grant until I challenged the appeals people to show me anyone else trying to do what we do.”
Tesco’s support came from a previous Labour government. And of course the Barnett Formula under which the Treasury apportions more public spending per head to Scotland remains in place. Barnett, to be fair, was not prepared in Scotland, and the North East in Scotland’s situation might feel satisfied.
But if Scotland chooses independence what follows for the North East of England? Will England (rather, Westminster) recognise in the resultant shrinkage the need to develop better the potentials in its territorial extremities? Or will the recent concentration of resources on London and the South East intensify, with an HS2 boost for Birmingham perhaps?
Part of Winn Group’s prosperity stems from its lower cost base. It secured its current 27,000sq ft premises at Byker in 2006 at around £5psf against rates of £30-£40 in Manchester and Liverpool, £60 in London – and even perhaps £16 on Newcastle’s Quayside and £10 on Grey Street today. Thus the group’s annual property costs are £200,000.
Another firm of similar turnover has targeted a prestigious location at a cost of £3.5m. That firm, Winn points out, has to get £3.3m more turnover than Winns just to meet additional rent and rates charges unnecessarily. That’s the sort of cost benefit the North East can offer.
Jeff has availed now of the Legal Services Act whereby companies can be licensed to become an alternative business structure (ABS) providing regulated legal services with some non-lawyer involvement. Ergo, as a lawyer might say, ABS means firms may seek external funding to boost growth. Winn, a 47-year-old father of three from Morpeth originally, found two non-legal partners: the international investment company JZ International (JZI) and Souter Investment Group, the private equity arm acting for the charity trust of Sir Brian Souter, founder of Stagecoach which Winn Solicitors has been known to act against.
JZI invests in and develops SMEs in partnership with founders and entrepreneurs. It’s into more than 30 companies across Europe. Andy Macfie, Souter Investments’ managing director, says that in a period of significant change now upon accident management, Winn Group is strongly placed. The new partners bought 60% into Winn’s holding company, and the group can now expand faster its one-stop shop service.
The day to day board now comprises Jeff and Dawn Winn and Ghazala Bashey, with sales director Chris Birkett and finance director Iain Richardson.
A senior board, meeting five times a year, comprises five representatives of the new investors, with Jeff, Dawn, Ghazala and Iain. Today the South East and London is the firm’s fastest growing area, and the opening of a London satellite may be considered. But half the total business still comes from the North East. The group uses North East suppliers “at every opportunity” but has had to go beyond for its specialised digital-type software.
The group’s paperless IT has driven down costs and it is recognised as no mere ambulance chaser but an operation with competence and ethos enough to have won the national Personal Injury Award 2011 and the Claims Technology Award 2010.
It has been profiled respectfully by the legal profession’s Press, and has crossed the welcome mat into the Accident Management Association, Motor Accidents Solicitors Society, the Law Society and the Personal Injury Panel.
Jeff Winn himself, recently named North East Entrepreneur of the Year by the Entrepreneurs’ Forum, is also shortlisted in EY’s North of England Entrepreneur of the Year Awards to be decided on 24 June in Manchester.
He’s already acclaimed nationally as the first ever personal injuries solicitor to take home a £10m pay packet. It helps keep his Aston Martin in fuel, and would settle in a few months if he so wished his £3.6m buy into Jesmond Towers, once La Sagesse School and one of only 4,000 Grade II* architecturally listed buildings in the country.
He and his partner Danielle Dunn, of Danielle Dunn Creative Agency, will have a five bedroom home there. Things are getting tighter financially for the sector, though. Under government changes, maximum recoverable costs for low-value claims are being slashed from £1,200 to £500.
Yet the group, in contrast to traditional legal practice, still provides a lot of work free, even to some guidance for enquirers perhaps not blameless but who may feel crushed under bureaucracy that often follows accidents.
Winn expects only around a dozen significant players to be left eventually out of around 2,000 claiming to do personal injury work. He also expects Winn Group to remain a front runner.
Whats in a name?
Jeff Winn’s enterprise seeded 15 years ago when another vehicle rammed his Jaguar. Despite the other driver being at fault, Winn’s insurer settled and still raised his premium. He lost his no-claims bonus, had to pay the excess, lost value in the Jag whose repair was unsatisfactory and, moreover, was given a tiny courtesy car.
“I lost around £5,000,” he still regrets. A successful criminal defence solicitor then – his father was Det Supt Al Winn, head of Newcastle’s murder squad – Winn couldn’t persuade partners at his firm, Singleton Winn Saunders, of a major financial opportunity. So he set up Winn of the RTA ilk with eight staff in 2002.
The group runs everything in-house – and besides the legal arm there’s temporary transport and injury and rehabilitation.
So is the very name Winn conducive to attracting business?
He laughs: “I did once come across a Mr Lose, believe it or not. I did think if I had a name like Lose I’d change it.”
Marco Pierre White Steakhouse Bar and Grill
Who mentioned diet?
As Jeff Winn had a London train to catch, Business Lunch took place at Indigo Hotel’s Marco Pierre White Steakhouse Bar and Grill, close to Newcastle Central Station. Opportunity also to meet the new hotel manager Paul Borg, delighted that about 60% of customers at the still young establishment are regulars.
Paul has most recently come from the Holiday Inn at Ellesmere Port and the Crowne Plaza at Chester. The table d’hote would have pleased most tastes. We called for cream of onion and thyme soup, and blue cheese panna cotta with pear puree, pickled celery, pancetta and walnuts. These in preference to confit chicken and ham terrine with homemade chutney.
Mains included pan fried sea trout with fresh pea puree, new potatoes, fricassee of broccoli and baby leeks. However, the diners selected instead, on one hand, slow cooked shoulder of lamb with wild mushrooms, baby turnips and crushed new potatoes, and on the other roast supreme of chicken with asparagus, pureed potato and baby beetroot.
Jeff, who’d earlier vowed to go on a post-holiday diet, ordered creamed cabbage and bacon from a selection of 10 side orders. We promised not to tell. Two reprobates agreed a bottle of chianti would revive memories of mis-spent youth for both.
This proving out of stock, our wine waiter suggested a Pinotage 2011, a Pinot Noir and Cinsaut (nee Hermitage) from cool slopes surrounding South Africa’s Table Mountain. A bit far from Tuscany but smooth indeed.
Had time allowed, dessert would have been a choice from chocolate and peanut terrine with salted caramel sauce and vanilla ice cream, blackcurrant parfait with baked apple, honeycomb and apple puree, or a selection of ice-cream and sorbets.
Lunch in short is value for money at £18 for two courses, £21.50 for three and £3.50 per extra side order (drinks excluded).