Troubled firm Slater & Gordon has announced that it will cut off its UK business to focus on Australia. 

The severed UK operation will be run by Anchorage Capital and other lenders in a debt for ownership swap. Slater and Gordon announced on the Australian Stock Exchange that "the separation of the UK operations provides the best option to enable both the Australian and UK operations to succeed in their own right and will enable the company to focus its management's time and resources on the Australian business." 

  Slater & Gordon realised it would have to chop off a limb to progress. Based on a true story.
 
Perhaps unsurprisingly there will be a rejigging of the S&G board in Australia with Andrew Grech and John Skippen both stepping down as directors. The new board will be headed by James MacKenzie, a former director of rival firm Maurice Blackburn. 

S&G was the first law firm to float in 2007, but the value of its shares have suffered a fall in recent times reminiscent of one of its PI clients tumbling head first down a flight of stairs. S&G recorded a AUD1 billion loss in the financial year 2015/16 and a loss of AUD546m in the financial year 2016/17. Its shares were suspended last year. In July this year, the firm agreed in principle to a AUD36.5 million settlement payment to its own disgruntled shareholders.

And the firm's adverts haven't been great either.

S&G launched in the UK in 2012 and tried to expand rapidly, but its acquisition of Quindell's legal division in 2015 was disastrous and has been blamed for the firm's failure. Quindell had overstated its financial results, saying it was profitable when it had been making a loss. At the time of the Quindell purchase, Andrew Grech, S&G's then Managing Director, suggested that it would change the fortunes of the firm. In a way, he was right:

 






If only they'd watched the video
 

S&G didn't respond to RollOnFriday's emails for comment.
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Comments

Anonymous 01 September 17 10:32

"the separation of the UK operations provides the best option to enable both the Australian and UK operations to succeed in their own right and will enable the company to focus its management's time and resources on the Australian business." - yeah, right! Or, more like, let's get shot of the UK fiasco and concentrate on rebuilding the Australian business. Only with the UK PI reforms, they will struggle to find a buyer for the UK 'business', which clearly is their intention. This isn't going to end well for the UK arm. I do hope that the decent staff there, that have been royally shafted, all get out of this OK. Perhaps some of the partners that have already jumped ship can reach out to them. Good luck to you all, it's appalling what you have all had to go through!

Anonymous 01 September 17 14:53

It's clear that the new owners will want to realise their money from the UK operation. The UK operation cannot possibly continue trading as it currently is given the recent financial results. I worked there previously and found most of the staff to be unproductive, stressed out, worried for the future and the management just did not care. They haven't even got the decency to tell their existing members of staff the news - instead people find out what's going on via the Law Gazette. The good lawyers with any degree of insight would have abandoned ship well before now - the ones left are living in vain hope that everything will be OK when it so obviously won't be

Anonymous 01 September 17 16:11

How in the name of all that's holy can a UK law firm with 12 offices in glamorous locations like Aldershot, Prescott, Fareham, Watford and Blackpool and only 102 solicitors: (a) overstate its profit by £75.4m, and (b) achieve catastrophic losses of £172.8m in one year? That's a loss of over £1.5m per solicitor in (face palm) one financial year. Maybe we don't always hit our billing targets, but how does a solicitor at an open-plan chipboard desk in Chelmsford with a few pencils, a PC and a phone lose over £1.5m in 12 months? Each of them burning up over £100k each month; that's equivalent to every single lawyer causing a loss of about £500 every working day and bringing absolutely nothing into the business whatsoever. They're advising on high street stuff like driving offences, trips and slips and med neg, not buying futures and options from Goldman Sachs.

Look at the last filed accounts of the UK entity Slater Gordon Solutions Legal Limited. It states:

"Revenue for the period was £118.7 million (2013 (restated): £73.4 million). Loss before tax for the period was £172.8 million (2013 (restated): loss of £21.6 million).

As a result of the review of accounting policies following the acquisition by Slater and Gordon Limited, a number of changes were made (see Note 3). These changes had the impact of reducing the prior year profit before tax from £53.7 million to a loss before tax of £21.7 million.

Following the acquisition by Slater and Gordon Limited, a rebranding exercise was performed. As a result, the brand intangibles recognised on previous acquisitions have been fully impaired (£4.7 million (2013: £Nil)."

"Fully impaired" indeed.

Anonymous 01 September 17 16:30

One issue was that the Head of Marketing that flew in from down under was obsessed with brand awareness and the fact that it mentions it in the audited accounts shows that brand awareness will be something that will be in brochure when trying to find a buyer... 35% of the public know of S&G and it's worth what? Nothing, Woolworths and BHS still have brand awareness and higher than S&G their value a big fat Zero. Well done to the head of marketing for achieving 35% of nothing, which is what... oh yes nothing.

Shame they didn't give too hoots about the staff being well and truly done over .

Anonymous 05 September 17 18:23

Once an "investment vehicle" buys the company you work for then get out as quickly as you can, even with a pay cut.

Anonymous 07 September 17 14:11

Why would anyone ever go to Slater & Gordon for advice after this debacle? So that you could lose a billion dollars? Not many people I know out there who could afford to take such advice.

Anonymous 07 September 17 15:50

well BLM are interested in buying some of it so said Tweedledum.... despair on all sides.

Anonymous 07 September 17 23:17

Blimey things are really bad if BLM are coming to the rescue. Poor S and G lawyers think it's bad there. Wait till they get to BLM with its world conquering ambition, disenfranchised workforce, Trump like senior partner who announces how exciting it is to be making redundancies, oblivious to how unhappy his workforce is, tells staff to leave if they don't like it and goes mental when they actually do. Anywhere else would be better guys. Seriously.