Legal Business

Redundancy watch: Pannone to make job cuts following Slater & Gordon takeover

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Manchester’s Pannone is offering voluntary redundancies to around 100 staff as a result of its recently announced takeover by Slater & Gordon (S&G).

As reported by RollOnFriday today (9 December), there will be no compulsory redundancies but Pannone has informed around 100 individuals that it is unlikely that there will be positions waiting for them at S&G. Neither Pannone nor S&G would comment when contacted by Legal Business.

After months of wrangling over which parts of Pannone would move over to Slater & Gordon, the firms finally announced that Australian-listed S&G would acquire the consumer personal injury (PI) business of Pannone in late November in a deal worth £33m.

The ASX-listed firm acquired the majority share of Pannone, including personal injury and serious injury, clinical negligence, court of protection, family, wills, trusts and probate, property, as well as some elements of the employment and dispute resolution practice areas, with the aim of increasing S&G’s operations in the UK by around 50% and grow headcount to over 1200.

For Pannone, the deal brings to an end a tough few years for the firm financially with revenues suffering as its key insurance business has been increasingly squeezed. It wasn’t the worst performing firm of the Legal Business 100 this year, but nonetheless has seen revenues fall 10% in the last five years from £50.8m to £45.6m.

Pannone Corporate LLP will now spin-off on its own, led by head of dispute resolution and regulatory Paul Jonson and senior partner Steven Grant. During the final stages of negotiations it emerged that executive board member David Jabbari, who joined Pannone a year ago from his role as COO at Clyde & Co, had resigned.

Other regional personal injury (PI) players to announce redundancies recently include Lyons Davidson, which having made two successive major joint ventures with Admiral and AA, made around 50 redundancies in mid-November. Leeds-based Walker Morris also recently confirmed that it is to close its PI business, making around 48 staff at risk of redundancy as a result of the closure, while Co-operative Legal Services also confirmed in late November that its personal insurance division was undergoing a restructuring that was likely to result in 60 job cuts.

sarah.downey@legalease.co.uk

Legal Business

Guest post: The rise and rise of Slater and Gordon – a tale of the ABS era

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If anyone wanted to see what alternative business structures (ABSs) can achieve, they need look no further than Slater and Gordon (S&G).

If you take into account the sum announced as going towards buying Simpson Millar – a deal currently on ice – S&G has committed around £150m towards its UK expansion since first announcing the acquisition of Russell Jones & Walker in January 2012. Could it have achieved this without being a listed company? I’m no financial expert, but I doubt it; raising money through share issues has been key, although debt levels are up sharply as well.

The growth on both sides of the world has been dramatic since S&G listed on the Australian Stock Exchange in 2007, when it had around 400 staff in 26 locations. Including Pannone, it will next year have 2,400 (split equally between the two countries) spread between 70 locations in Australia and 12 in the UK. Its 2006/7 revenues were £35m (at current exchange rates); its 2013/14 revenues are now projected to exceed £210m.

Most of this growth has been through acquisition – more than 20 deals in Australia since listing, mainly small ones given the nature of the market, but a couple of big ones too. S&G has been more aggressive in the UK by this measure, but it still has a long way to go on name recognition. S&G claims huge brand awareness in Australia, particularly in Victoria, its home state, but the UK is obviously a much bigger market where it has been for less than two years.

It is starting to address this through a concerted TV advertising campaign, and the press team is doing an impressive job of getting S&G lawyers in front of all sorts of TV cameras and in the newspapers. That the firm is taking on all sorts of high-profile cases, from Saville to interest-swap mis-selling, is a major help too.

The access to capital S&G has gives it the chance to push itself up the food chain and in front of the many intermediaries who have so successfully inserted themselves into the legal market over the past 15 years or so. It’s a bold move and it’s worth noting that thus far there is no evidence that the firm has been in any way compromised by being publicly listed.

But then this is a smart operation looking to replicate its success in Australia – the fact that in recent months chief operating officer Cath Evans and marketing and business development chief Kalle Amanatides have both relocated to the UK is evidence of this.

S&G is banking on being one of the handful of brands that some predict will come to dominate the consumer legal market in the coming years. There are already several jockeying for that position, whether Irwin Mitchell, which has still to really show its hand, and QualitySolicitors, or the various big brands that now have ABSs, the Co-op, AA, Saga, Stobarts, BLG Group (aka the meerkat people) and shortly Direct Line to name some of them.

I’ve written before that one of my most gobsmacking moments of the year came a couple of month ago when I heard a radio advert from Churchill (a Direct Line brand) whose sole purpose was to promote its legal advice line – I’d never come across an insurer making a virtue out of the access to legal advice they provide, as opposed to hiding it in the policy small print.

It is this kind of competition that S&G is up against, with resources, name recognition and a customer base it cannot hope to match. Though there are advantages to S&G being a ‘traditional’ solicitors’ firm (in broad terms), arguably there are disadvantages too given that there is a proportion of the population who view solicitors with suspicion and may find comfort in using a brand they trust.

But the vision is clear, the war chest has been well and truly opened, and S&G must be admired for what it is trying to do. This is perhaps the model law firm of the post-ABS era – lawyers to the core but a business from top to bottom.

Neil Rose is the editor of Legal Futures, click here to follow him on Twitter

Legal Business

Consolidation continues as Manchester institution Pannone succumbs to Slater and Gordon’s advances

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After months of speculation, Slater and Gordon has finally announced the acquisition of the consumer services and personal injury (PI) business of Manchester’s Pannone today (28 November) in a deal worth £33m.

Slater and Gordon will acquire the majority share of Pannone, including personal injury and serious injury, clinical negligence, court of protection, family, wills, trusts and probate, property, as well as some elements of the employment and dispute resolution practice areas.

According to a statement by Pannone: ‘A new and independent business called Pannone Corporate LLP will be formed at the same time which will focus on commercial and corporate work for business clients.’

The acquisition aims to increase Slater and Gordon’s operations in the UK by around 50% and grow headcount to over 1200.

Due diligence has been substantially completed and the transaction approved by the Slater and Gordon board and the Pannone partnership. The transaction is expected to complete in February next year.

Slater and Gordon head of UK Neil Kinsella (pictured) said: ‘This acquisition will transform us into a significantly larger firm offering a broader range of legal services and allowing us to help more clients in their fight for justice. The planned acquisition of Pannone Solicitors is a vital step in our strategy for growth, bringing us closer to our aim of becoming the UK’s leading law practice for everyday people.

‘We believe Pannone is an ideal partner for Slater and Gordon. I am particularly pleased that this transaction significantly increases our personal injury practice area, while also reinforcing our commitment across a broad range of personal legal services. Bringing together our teams will give us leading positions in many fields, including family law in Manchester, and strengthen our ability to help ordinary people across a broad range of legal areas.’

For Pannone, this takeover of the lion’s share of its business brings to an end a tough few years for the firm financially with revenues suffering as its key insurance business has been increasingly squeezed. By no means the worst performer in the Legal Business 100, the firm has nonetheless seen revenues fall 10% in the last five years from £50.8m to £45.6m.

Pannone Corporate LLP will be led by partners Paul Jonson and Steven Grant. Jonson is the head of dispute resolution and regulatory at Pannone, while Grant is currently the senior partner, former managing partner and head of corporate, at Pannone. A statement from Pannone Corporate LLP said that they will be joined by around 50 other partners and lawyers from the commercial side of Pannone’s practice and that the firm will focus on its existing client base while competing in the upper mid-market across its practice areas.

Jonson commented: ‘We are all hugely excited by this opportunity to do something different. We have the ability to offer continuity to our clients from day one with the same teams and levels of client service that our clients have been used to.”

Grant added: ‘We believe our proposition is very much in line with current market requirements and our clients will be hugely supportive of our plans. We intend to offer an attractive alternative to the traditional law firm model.’

This latest move will further consolidate Slater and Gordon’s position in the personal injury sector, particularly in the Manchester region. In October the firm completed the acquistion of Manchester-based clinical negligence and PI practice John Pickering & Partners. This is in addition to Manchester personal injury firm Fentons in August, adding around 280 staff to the rapidly growing firm, as well as Russell, Jones & Walker for £53.8m last year, Goodmans Law and the personal injury practice of Taylor Vinters.

This summer Slater and Gordon revealed a total 2012/13 revenue increase of 36.7% to A$297.6m and net profits up by 67.6% to A$41.9m.

jaishree.kalia@legalease.co.uk

Legal Business

Updated: Crunch time – Pannone partners face imminent vote on Slater & Gordon acquisition

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Pannone’s ongoing discussions with Australian-listed Slater & Gordon (S&G) over the sale of its consumer services and personal injury (PI) practice are coming to a head, with an equity partnership vote originally scheduled for next Tuesday (12 November) now put back until 19 November.

Should the Manchester-based firm’s partnership approve the business sale agreement – which requires a 75% vote – the firm’s board will now meet on 25 November to exchange agreements. Until today (8 November) that date had been set at Friday 15 November.

To date the discussions have been hampered by disagreements over how to house the corporate team, which is expected to be hived off and continue to practice under the Pannone name. There are also questions over whether the 241-lawyer firm’s white label service Affinity and Connect2Law network fits with S&G’s model.

S&G is expected to take the serious injury, clinical negligence, property, and family teams, together with certain parts of the dispute resolution practice.

Now listed in the LB100 top 65 law firms, S&G, which generates an annual revenue of £45.5m, confirmed in late October that it had acquired Manchester-based clinical negligence and PI practice John Pickering & Partners.

The newly-acquired Northern firm has offices in Manchester, Liverpool, Sheffield and Halifax and annual revenue of £3m. S&G’s UK chief executive Neil Kinsella said the acquisition would see its operations in the UK grow by approximately 27 staff.

Should the Pannone deal go ahead, it will further consolidate the acquisitive S&G’s position in the personal injury sector, particularly in the Manchester region. Other recent acquisitions including Manchester personal injury firm Fentons in August, which added around 280 staff, as well as Russell, Jones & Walker for £53.8m last year, Goodmans Law and the personal injury practice of Taylor Vinters.

‘It’s giving them a chance to almost leapfrog Irwin Mitchell, and possibly make them the biggest player, and at the higher end of this market’ one regional partner commented.

Pannone declined to comment.

sarah.downey@legalease.co.uk

Legal Business

Pannone presses for S&G deal in wake of failed Cobbetts bid

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Having previously pursued a merger with the now defunct Cobbetts (as it turned out, a lucky reprieve), Pannone’s current discussions with Australian-listed Slater & Gordon (S&G) are seeing talks over which parts of the Manchester-based firm’s diverse business will be included in any deal.

With the firm effectively split into four limbs: its commercial arm; the private client, clinical negligence and personal injury business; its white label service Affinity; and Connect2Law network, discussions are ongoing as to whether the latter two divisions fit with S&G’s model.

Legal Business

Slater & Gordon takes over Manchester PI firm as Pannone vote looms

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ASX-listed firm Slater & Gordon (S&G) continues to make inroads into the UK’s personal injury (PI) market having confirmed today (24 October) it has acquired Manchester-based clinical negligence and PI practice John Pickering & Partners.

S&G, which generates an annual revenue of £27.7m, made the announcement at its annual general meeting in Australia yesterday, but made no mention of recent reports that it is in talks to acquire Manchester-based Pannone’s consumer services business.

Acknowledged by the Legal 500 as ‘highly respected for its representation of trade union members in industrial disease claims’ the acquisition of John Pickering, a leading chest and asbestos disease law firm, has been ‘substantially completed’ according to S&G.

The Northern firm currently has offices in Manchester, Liverpool, Sheffield and Halifax and annual revenue of £3m. S&G’s UK chief executive Neil Kinsella said the acquisition would see its operations in the UK grow by approximately 27 staff.

This latest move will further consolidate the acquisitive Australian firm’s position in the personal injury sector, particularly in the Manchester region. Other recent acquisitions including Manchester personal injury firm Fentons in August, adding around 280 staff to the rapidly growing firm, as well as Russell, Jones & Walker for £53.8m last year, Goodmans Law and the personal injury practice of Taylor Vinters.

Kinsella (pictured) said: ‘We believe John Pickering and Partners is an ideal partner to advance our plans for strategic growth and to boost our presence in the UK. Both firms are focused on delivering high quality, affordable legal services to everyday people and this is an exciting time for Slater & Gordon as we move towards being able to bring our legal services and expertise to more people.

‘The expansion of our personal injury team will see the addition of a team with an excellent reputation as experienced defenders of the rights of asbestos disease sufferers for compensation. Together we have more than 30 years of experience helping the victims of asbestos related diseases and with more people being expected to be diagnosed than ever before over the next few years, we will be in the best possible position to help the victims of this terrible disease and their families.

‘The planned acquisition will help cement S&G’s ambition to be one of the UK’s leading consumer law firms and it is a big part of a continued growth strategy.’

John Pickering and Partners managing partner Paul Glanville, added: ‘Our organisations have much in common, both having forged reputations in fighting for justice for asbestos victims. At a time when Government reforms and the insurance industry are putting greater pressure on asbestos disease victims, we feel that by combining our strengths, we will be able to ensure that we offer the best representation for our clients.’

The transaction is expected to be completed on 27 November.

As for Pannone, some of the partnership is understood to be still wrangling over what parts of the firm are to transfer to S&G, including discussions over whether its white label service Affinity and Connect2Law network will fit with S&G’s model.

A meeting between Pannone’s equity partners is expected today or tomorrow (25 October) as the firm had hoped to come to a decision by October 31st.

sarah.downey@legalease.co.uk

Legal Business

Further PI shake up appears imminent as Pannone votes on Slater & Gordon part acquisition

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Acquisitive Slater & Gordon looks set to acquire the personal injury practice of Manchester-based Pannone as sources close to the firm say it will vote next week in what is tipped to be a done deal.

The Australian Stock Exchange (ASX) listed firm, which last month announced its acquisition of Manchester-based personal injury firm Fentons, is understood to have been in talks with Pannone for several months.

Given that the firm’s personal injury practice is thought to make up for around 60% of the firm’s revenues, this move could lead to the break-up of the firm and see its referral service, Connect2Law, and white-labelling arm, Affinity, sold off as well, although sources suggest that Slater & Gordon is not interested in any of Pannone’s commercial legal practice.

Neither Pannone nor Slater & Gordon made any attempt to deny press reports of an impending deal, defaulting to the standard non-comment statements that are routinely deployed in such scenarios.

‘It’s no secret that we have an ambition to continue to grow our business in the UK, including by acquiring firms who share our values,’ said Neil Kinsella, CEO of Slater & Gordon. As Slater & Gordon is a publically listed company, any announcements must first be made to the ASX and Kinsella added he is ‘not in a position to comment on any specific anonymous reports at this time’.

Pannone also released a statement saying: ‘We have been linked to many firms over recent years and will always look at opportunities which align with the firm’s strategic aims; however there is nothing to report on this particular rumour.’

Firms that have been linked to Pannone in the past include the now defunct Cobbetts, which the firm was thought to be in talks with regarding a merger last year.

This latest move would further consolidate Slater & Gordon’s position in the personal injury sector. Last month it was revealed that the firm is to acquire Manchester-based personal injury firm Fentons, in a deal expected to be completed by next month. This would add around 280 staff to the rapidly growing firm, which has already acquired Russell, Jones & Walker for £53.8m last year, Goodmans Law and the personal injury practice of Taylor Vinters.

One Manchester-based partner commented: ‘Due to the cost associated with running a personal injury practice, not many firms get into that line of work.’ However, Slater & Gordon last month revealed a total 2012/13 revenue increase of 36.7% to A$297.6m and net profits up by 67.6% to A$41.9m.

david.stevenson@legalease.co.uk

Legal Business

Keeping up with Kinsella: Slater & Gordon’s slowly but very surely approach to mergers set to continue

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If you had reached the impression that Slater & Gordon’s acquisitive streak had come to a natural pause, if only for breath, that impression would be wrong.

Having last week officially declared it is to acquire leading UK claimant personal injury firm Fentons, its fourth buyout in two years, chief executive Neil Kinsella (pictured) tells Legal Business that the ASX-listed group has no intention of stopping any time soon.

‘We continue to look at acquisitions that might make sense strategically –without rushing,’ he explains. ‘We look at who is right for us [and consider whether] it fixes the geographical gap. It’s not just about personal injury either, it’s [also] about consumer legal services. We’re pretty optimistic. We’ll continue to grow.’

The Australian-listed firm last Wednesday (21 August) announced that due diligence on 120-lawyer Fentons, which generates an annual revenue of £27.7m, is substantially completed and formal business sale agreements have been executed with the London and Manchester firm. The acquisition follows last year’s landmark £53.8m deal with Russell Jones & Walker, followed swiftly by a tie-up with Goodmans Law and Taylor Vinters, although discussions with 10-office national firm Simpson Millar, widely thought to be a done deal after it was announced in May, have been deferred until early 2014. The total annual revenue of Taylor Vinters, Goodmans and Fentons is £35m, with Taylor Vinters contributing £3.9m and Goodmans £3.4m.

The acquisitions are set against a backdrop of a post-Jackson-reforms personal injury market, ripe for consolidation and with a number of even the largest players open to new entrants with deep pockets. But while Slater is undoubtedly making the most of its strong position, the fact that it is not expecting to lay off any staff as a result of its latest acquisition goes a long way to supporting Kinsella’s assertion that the acquisitions have been approached carefully, with time spent working on the integration process and ensuring the compatibility of cultures between the firms.

‘Fentons are very much in our strategic sweet spot,’ he notes. ‘It’s an independent firm specialised in personal injury – so they’re not dependent on any intermediaries for getting work. It’s based upon the brands they’ve begun to develop with direct marketing and the reputation they’ve built on serious injury matters.’

Furthermore, while Kinsella has not ruled out further acquisitions an immediate priority is investment in organic growth. The company is in a good financial position to make that investment, after last week releasing 2012/13 financials that show a 36.7% revenue increase to A$297.6m while total net profits rocketed by 67.6% to A$41.9m.

The next notable announcement from the 1,000-staff firm is likely to be progress on the Simpson Millar talks.

However, with a firm with some cash to spend in a market looking for a solution, you just never know.

Kinsella says: ‘We’re very satisfied – we feel we’ve achieved all the milestones we wanted to, we hit the forecast that we wanted to [and] that’s a very solid platform for moving forward with the acquisitions.’

sarah.downey@legalease.co.uk

Legal Business

UK PI bandwagon – Slater & Gordon buys Fentons and reveals 2012/13 results

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Slater & Gordon today (21 August) made further inroads into the UK personal injury (PI) market as it formally announced to the Australian Stock Exchange (ASX) the acquisition of leading claimant firm Fentons, although discussions with earlier merger talks partner Simpson Millar have been deferred until early 2014.

The Australian-listed firm confirmed that due diligence on 120-lawyer Fentons, which has an annual revenue of £27.7m, is substantially completed and formal business sale agreements have been executed with the London and Manchester firm. Macfarlanes advised on the deal, led by corporate partners John Dodsworth and Jessica Adam, opposite Pinsent Masons for Fentons, led by corporate partner Gregg Davison.

Slater & Gordon’s managing director Andrew Grech said of the deal, which was first reported last week: ‘We are delighted to announce today the proposed acquisition of Fentons Solicitors LLP, the largest specialist direct to consumer claimant PI practice in the UK. We expect the transaction to be completed in early October 2013 are looking forward to the integration of Fentons with our existing and growing operations in the UK.’

An earlier deal to acquire the personal injury practice of Taylor Vinters completed on 16 August and the acquisition of Goodmans is on track to complete on 30 August. The Australian firm said the deals are ‘a significant step in building depth of talent and business base required to accelerate UK growth.’

However, discussions with 10-office national firm Simpson Millar, which had widely been assumed to be a done deal after it was announced in May, have been deferred until early 2014 with no further explanation at this stage.

Fentons is by far the largest of Slater & Gordon’s recent UK acquisitions. The total annual revenue of Taylor Vinters, Goodmans and Fentons is £35m, with Taylor Vinters contributing £3.9m and Goodmans £3.4m. They follow last year’s landmark £53.8m acquisition of Russell Jones & Walker.

The news comes as the Australian firm also today revealed a total 2012/13 revenue increase of 36.7% to A$297.6m and net profits up by 67.6% to A%41.9m.

Grech said: ‘FY14 is expected to be an exciting and very busy year as the Group integrates new businesses in the UK whilst continuing to grow the Australian business organically.’

caroline.hill@legalease.co.uk

Legal Business

Personal injury: Slater & Gordon in talks to acquire Fentons

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Further consolidation in the personal injury market looks set to take place next week after it emerged that acquisitive Australian-listed firm Slater & Gordon (S&G) is in talks with London and Manchester personal injury firm Fentons.

As first reported by RollOnFriday, S&G is expected to announce the deal on Tuesday (20 August). If the acquisition goes through it will nearly double S&G’s 146-lawyer UK arm, adding 120 lawyers, including 36 partners and 30 fee-earners.

Speaking to Legal Business neither firm denied the deal was taking place. However, Slater & Gordon’s chief executive Neil Kinsella (pictured) said: ‘While we find reports about our discussions with other firms in the press flattering, the reality is that we are in talks with a variety of firms at any one time and never respond to questions about specific confidential discussions.

‘As a publicly listed company, all announcements about potential acquisitions of a material nature would of course be first made to the ASX.’

Last year S&G acquired Russell Jones & Walker in a landmark £53.8m deal and went on to acquire Simpson Millar, Goodmans Law and the personal injury practice of Taylor Vinters.

This latest move comes as personal injury firms respond to the banning of referral fees by Lord Justice Jackson’s civil litigation reforms, which came into effect on 1 April 2013. In June this year, comparethemarket.com owners BGL Group acquired leading personal injury firm Minster Law, as Minster’s chairman Adrian Christmas told Legal Business that players in the personal injury market need ‘deep pockets and to take the long term view.’

sarah.downey@legalease.co.uk