Cox: Profitability and focus
National firm Simpson Millar is to exit private client services except for personal injury and family law as part of a major restructure sparked in part by the introduction next year of fixed recoverable costs.
The firm is close to offloading its 35-strong conveyancing team to another firm and closing its dispute resolution, employment, and wills, trust and probate departments. It is also exiting some travel personal injury work.
It is consulting with around 100 staff whose roles are affected, with the firm set to shrink to around 420 staff concentrating on personal injury, public law and family law.
Chief executive Greg Cox said he “firmly” believed the firm could challenge “the way that legal services are offered to clients”.
He continued: “However, like all firms in the legal sector we must adapt to the changing legal services market – including the extension of fixed costs to large parts of civil litigation – and wider external forces.
“The proposed restructure takes into consideration these challenges and provides us with an opportunity to review our operational efficiencies, get the firm ready for the forthcoming changes and further invest in our growth areas.”
Mr Cox told Legal Futures that the firm had been examining the practice “and making sure we’ve got right profitability margins”.
The aim was to ensure both “profitability and focus” and “getting ourselves in the right position for fixed costs”. They will apply to most money claims worth up to £100,000, meaning they are likely to catch a lot of personal injury work.
The decision on the dispute resolution department was not driven by the prospect of fixed costs, however.
Mr Cox explained that Simpson Millar’s non-injury litigation work was mainly smaller group actions, such as for leaseholders affected by onerous ground rents, rather than a generalist civil litigation practice.
“We’re seeing those books coming towards an end and we don’t necessarily see the flow of new work,” he said.
However, Mr Cox did not rule out returning to the areas the firm was leaving in time.
In Simpson Millar’s most recent accounts, for 2020, revenue fell 7% to £30m – which it attributed largely to extended case durations due to Covid – and a loss of £8m, on top of losing £5.7m in 2019.
They recorded that, in December 2021, the firm accepted a capital contribution of £11.7m from its parent company, Doorway Holdings.
On the same date, Simpson Millar repaid £8.2m in capital, and £3.5m in accrued interest, owed to Doorway 4 Law – the ultimate parent company – under a £25m long-term loan facility.