First4Lawyers: we’re recovering from ‘tumultuous change’ in PI market
One of the country’s biggest claims management companies says it is bouncing back from a year when profits dipped 15%.
First4Lawyers accounts for the year ending 31 March 2015, show that profit before tax fell from £2.626m to £2.2m in the course of 2014/15.
Turnover also took a hit, dropping 14% from £13.2m to £11.47m.
The figures give an insight into the continuing fluctuations in the personal injury market as companies and law firms find ways to maximise profits following the referral fee ban and fee cuts which came into force in April 2013.
A spokesman for the Yorkshire-based company said the 2014/15 year was a period of ‘tumultuous change’ for the PI industry but that First4Lawyers has ‘weathered the changes arising from the Legal Aid, Sentencing and Punishment of Offenders Act [which banned referral fees] well’.
She added: ‘The results are largely as we expected, with PI firms tightening their belts and reducing the number of cases they took from us during this period as they first grappled with the changes. ‘However, this initial retrenchment is now being reversed and we are again seeing PI firms increasing the cases they take from us.’
First4Lawyers said it improved its gross-margin percentage against turnover and made investments in staff and infrastructure to work in a wider spread of legal services.
In May 2015 the company diversified into employment, property, wills, finance, family and motoring law, setting up a call centre of 38 staff to manage the new work streams and send out claims initially to a small number of its existing panel of law firms. Its TV advertisements feature former tennis player and radio host Andrew Castle (pictured).
According to the accounts, staff costs increased from £711,734 in 2014 to £949,369 in 2015, with the amount paid to the highest-paid director increasing from £112,500 to £185,575.