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Stock market listed law firm whose share price has tanked by 90% cuts jobs but not training contracts

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Slater & Gordon’s future lawyers unaffected by redundancies

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A raft of redundancies are set to hit personal injury giant Slater & Gordon (S&G), in a nightmare year that’s seen its share price fall by nearly 90%. But the firm’s future solicitors and trainees will be OK — for now, at least.

It’s looking likely that two of the firm’s offices — one in Derby and one in Manchester — will be closed, making up to 51 fee-earners and support staff redundant. Happily, there are no rookie lawyers in these locations. An S&G spokesman told Legal Cheek:

There would be no impact on our trainee contracts as a result of this announcement. We do not have anyone in those offices on a trainee contract and we have no seat rotations planned in either of the offices.

It is not yet known how the firm’s troubles will more broadly affect its 15-strong annual training contract programme over the year ahead.

The redundancy consultations round off a tough couple of months for the firm, which is one of the biggest providers of consumer legal services in the UK.

The Australian-owned outfit saw its share price tumble by more than 50% last November, in the wake of a government announcement targeted at curbing Britain’s ‘compensation culture’.

The Chancellor of the Exchequer announced a new small claims limit of £5,000 for personal injury cases, causing mass hysteria for the personal injury firm’s shareholders. Panic-stricken, shares were sold off in bulk, slashing S&G’s footprint on the stock market by an unbelievable 88% over the past year.

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It was perhaps inevitable that this stock market frenzy would hit home eventually, and now it looks like redundancies are imminent.

The proposals have cemented S&G’s place on a long — and ever-growing — list of unsuccessful law firm initiatives that have toyed around with more innovative business structures. Such experiments have been allowed following the coming into force of the Legal Services Act, which enables anyone to own a law firm — not just solicitors, as had previously been the case.

The prospective closures represent a big U-turn for S&G, which is famed for its TV adverts. Speaking last year, it didn’t seem too bothered by the falling share value at all, commenting:

Whilst the government’s announcement was unexpected, the company believes that the scale and diversity of the Slater Gordon Solutions (SGS) business in the UK positions it well to deal with the potential impact of any future legislative change.

But now, the tone is much more bleak. In a statement issued today, the firm said:

As part of a review of our property portfolio Slater and Gordon has begun assessing the feasibility of closing two of our offices, Failsworth and Derby.

The statement continued:

All staff affected have been made aware there is the possibility of redundancy. Understandably, this can be unsettling for staff, but we will, where possible, help individuals find other opportunities within the Slater and Gordon Group.