31 January 2012
RJW sets sights on dominating consumer legal market
Grech: long-term ability to plan
Russell Jones & Walker (RJW) aims to use its new access to capital to become one of the two or three players that will “dominate” the consumer legal market in the years to come, its chief executive has said.
This will be done through growth – both organic and probably by acquisition – and using the full range of profile-raising tools, including television advertising.
Neil Kinsella said that with the legal market changing, “to be a winner, you need a big enough voice – and that needs capital”. The firm’s acquisition by Australia’s Slater & Gordon, announced yesterday, provides that.
Andrew Grech, managing director of Slater & Gordon, told Legal Futures that the goal is to establish “a true legal services brand” – not just a well-known name like some claims management companies, “but a brand that stands for something”. He added: “We bring strong experience of how to build a brand.”
When Slater & Gordon listed in 2007, it had a 5-10% share of the consumer personal injury market, he said. Now it has about 25%. The essence of building the brand, he said, is to “do great work for people who deserve great work done for them, and tell the world about it”. The firm wil
l use “all the modalities available” to tell the world, such as television, radio and billboard advertising.
The deal gives RJW long-term ability to plan, Mr Grech continued. The other options had been bank credit, “which can be very uncertain”, private equity investment – which is “very short term and closed end” – or listing, which is “very difficult in the current market”.
Mr Kinsella said the pair have “a joint strategy that’s not absolutely dependent on acquisition… [but] we will definitely be looking for the right opportunities”.
The Jackson reforms are set to have a significant impact on RJW’s business given that it handles a great deal of claimant personal injury work. Mr Grech said it was too early to predict the impact of the changes, but made it clear that he was no fan of the current system, and particularly after-the-event insurance, which does not exist in Australia and he saw as providing little benefit to clients.
Though the reforms may reduce claimant firms’ income, Mr Grech said that removing some of the layers of the personal injury process could make up for this. “There are too many people clipping the ticket for too little value to the consumer,” he said.
RJW was advised by City law firm Macfarlanes, while Slater & Gordon used LG, led by head of corporate Christopher Tite, himself a pioneering solicitor from when he co-created the law firm which was first associated with PwC and then Ernst & Young before merging it with LG in 2004. Legal Futures can also reveal that leading commentator and consultant Professor Stephen Mayson advised on the deal.
See blog: Here come the Aussies
By Legal Futures
Tags: private equity, Slater & Gordon, stock market listing