The pandemic hit Slater & Gordon hard, with a £12m profit turning into a £20m loss in 2020, newly published accounts have shown.
The national law firm’s turnover for the year fell 8.6% to £111m, with the directors’ report attributed to the decrease in road traffic – and therefore personal injury claims – throughout the year from when the first lockdown was imposed in March 2020.
As a result, the total shareholders’ deficit grew to £117m, although as at 31 December S&G also had net assets of £108m and cash of £14m. The firm manages its financing via a shareholder loan facility, put at £34m at that date.
The directors said their forecasts gave them confidence about the firm’s finances, saying their cash flow forecast for the following two years showed “significant headroom over its shareholder covenants”.
The loss came even though the firm actually saw a 6.8% increase in the number of new cases, to almost 47,000, with nearly 200,000 direct consumer enquiries received.
S&G attributed the uplift in part to the partnership announced in 2020 with medico-legal and insurance services giant Examworks.
Under this, ExamWorks began handling S&G’s medical reporting and rehabilitation needs and made S&G its preferred legal services supplier after selling it the law firm it owned, Jigsaw Law. The S&G accounts put the price at deferred consideration of £2.5m.
The various strategic decisions it made saw the number of staff fall over the year from 737 to 485.
During last year, S&G launched ‘miplatform’, what it said was a ‘first of its kind’ digital legal service that enabled clients to progress their matters with little or no direct contact with a lawyer.
The accounts for the wider S&G group have not yet been filed at Companies House.