The job cuts have started in earnest at troubled listed law firm Slater and Gordon.
A new CEO was named yesterday and reducing of the company’s size as part of the bailout deal between a bunch of hedge funds, led by Anchorage Capital late last year.
The cuts are expected to result in significant job losses.
Former KPMG national managing partner John Somerville will replace Hayden Stephens, a 25-year veteran at the company who stepped into the role after the departure of former chief Andrew Grech, the CEO who took the company into the UK and a $1.5 billion dollar disaster called Quindell that broke Slater and Gordon.
Slater and Gordon said on Wednesday that it would be “winding down or divesting or downsizing” its succession, criminal and family law practices. It will also retain a smaller commercial practice. That practice is currently led by Mark Walter.
After the cuts, Slater and Gordon says it return its focus on its core personal injury business. It will also retain its class action and industrial and union practice. At the same time, the law firm will expand its union services business to maintain a criminal services and free wills offer for the firm’s union clients.
Slater and Gordon’s recently appointed chairman James MacKenzie, said the new CEO was a proven leader.
"Over the last 25 years, he has developed a career combining consulting to some of Australia’s largest corporations and governments with growing and leading advisory businesses within KPMG,” Mr MacKenzie said.
Mr MacKenzie also praised Mr Stephens for his service to the company, and said he respected his decision to leave the firm.
"Without his leadership, and the support of Anchorage Capital Group, I don’t believe we would be in the strong position we are today," Mr MacKenzie said.
The shares rose 0.4% to $2.99 (they underwent a 100 for one share consolidation late last year as part of the bail out). So that is effective 3 cents under the old share structure.
But the consolidation has had the required effect as the company now has a market cap of more than $210 million instead of less than $50 million a year, so investors think there is more value there now than before, which is an advance.