Legal Business Blogs

‘A process of transition’: Slater and Gordon to close more offices as UK restructure continues

Slater and Gordon‘s (S&G) group managing director Andrew Grech has provided an update on the firm’s UK restructuring programme which has included a 16% reduction in headcount as well as a re-organisation of the legal services business into three divisions: serious and specialised personal injury claims; family law, employment law and dispute resolution and fast track personal injury claims.

The project, dubbed the ‘UK Performance Improvement Programme’ also includes a focus on rationalising business generation investment, enhancing programs and systems and communications and employee engagement.

Speaking at S&G’s annual general meeting Grech (pictured) said: ‘The business remains in a process of transition as we implement a very significant performance improvement programme. Whilst we are making progress there are still challenges and a lot more work that needs to be done to build a sustainable business in the UK.’

Grech added: ‘It is important to recognise that this is a business transformation programme which will take time to complete. We are substantially through phase one with focuses on a re-organisation of people into the three legal services businesses and a rationalisation of the number of sites at which we have a presence. Phase two is on improving productivity and cash conversion. There are a number of project teams reporting into the steering committee undertaking the changes to work practices, process and technology required to achieve the desired improvements.’

In addition to the reduction in headcount, S&G have also set a target of reducing operating sites from 47 to 32 by January 2017 ‘with further locations scheduled to be re-organised or closed in the remainder of 2017’.

Grech concluded: ‘In summary, we are making progress in the UK. There are risks and challenges that we still face as we strive to achieve this. These risks are well understood and are being managed but remain constant.’

S&G was forced to restructured its UK operation after posting an A$958m (£493m) loss for the six months ending 31 December 2015, primarily due to a hefty writedown of its UK business.

Senior names to depart from the firm this year include general counsel and company secretary Moana Weir who resigned after just two months while in February its UK chief, Neil Kinsella, announced his retirement as UK head of general law, with Siri Siriwardene replacing him.

The annual report for the year ending June 2016 reveals that the value of work in progress decreased by A$89.2m (£53m), of which just under half is due to a decline in case volumes in the Australian and UK practices and the resolution of acquired work.

In 2015, the personal injury business Slater Gordon Solutions, which took on the acquired professional services division of Quindell, accounted for 6% of the group’s A$627.3m (£375m) income. That proportion has jumped to 50% of the group’s A$908m (£543m) turnover for 2016.

The Australian arm of that business accounted for half the group’s turnover in 2016 and today stands at 26%. The UK business is stated to generate a £300m annual turnover.

Earlier this year it emerged S&G is to sue Watchstone Group, formerly known as Quindell, following the £637m acquisition of the UK company’s professional services division in 2015.

Melbourne firm Maurice Blackburn Lawyers filed a AU$250m class action on behalf of S&G shareholders in early October while Sydney-based ACA Lawyers is also preparing a similar suit.