Another new company has emerged to help law firms looking to leave the personal injury (PI) arena.
PI-Solutions can help firms by brokering a sale and offering a fully managed and compliant run off. The company says that it can help firms avoid certain liabilities normally associated with acquisition by splitting up a book of business and discreetly identifying multiple purchasing law firms, which are willing to place a higher value on the work in progress (WIP).
A run off of an exiting business’ caseloads is then carried out by securing a panel of selected firms, allowing the selling firm to achieve up to 100% of the WIP value by avoiding those costs associated with incentivising and motivating existing employees to efficiently undertake a run off.
Launched by managing director, David Johnstone and operations director, Nicola Klimkowski, PI-Solutions says it can also provide immediate cash to cover areas such as exit liabilities, redundancy, costs, professional indemnity and run off.
“Personal injury law firms must now settle in excess of ten matters to achieve the same turnover resulting from three matters pre-April, so many are thinking about their future," said Johnstone, who was a director of a business that provided loan funding for firms of solicitors from 2004 to 2008, which was then itself strategically placed into run off, giving him first-hand experience of what to expect when exiting the PI arena.
"What we are offering is support to those considering not taking on any more new work. Previous experience has put me in good stead to help firms plan for this and support withdrawal from the market as quickly as possible, while getting maximum value from selling or running the firm off. I’ve done it before so I’m aware managers want to be able to focus on the future without too many distractions."
"Internal run off is tricky because it involves significant costs and is fraught with motivational and behavioural issues among staff who haven’t jumped ship," he said.
"Talented and hardworking staff will secure employment elsewhere rather than wait to be pushed and the ones left will be terrified of coming in to an empty desk so will drag work out. With little or no new work coming in, the remaining staff will feel like they’re working in a graveyard and will have to be incentivised if efficiency is to be maintained. All of this will result in the dilution of hard earned assets.
"It will be much easier to bring in a company like ours to outsource the run off, as we would put the correct drivers in place to ensure its assets are not wasted.”