It's a tonic for staff that the firm has struck a deal with lenders, but executives face a daunting challenge to make the numbers add up.

While most in this country were enjoying their bank holiday, in Australia a deal was being agreed which could potentially save hundreds of UK lawyers' jobs.

Slater and Gordon left it late to strike an agreement with its lenders, but having reached the end-of-April deadline, terms were approved to give the company two years to turn things around.

The firm suffered catastrophic losses in the second half of 2015 and a new plan was drawn up to convince the banks it was viable. Monday’s deal, the Australian press suggested, was enough to see off the disaster of potential insolvency (not to mention the mess of thousands of unresolved cases).

Great news for staff, of course. And naturally, the S and G team is buoyant, describing this as a ‘positive and clear endorsement’ of its improvement programme.

But commentators are cautious. While the wolf has been kept from the door, it’s still howling at the front gate and waking up the neighbours.

The debt repayment terms are eyewateringly tough. The company must pay back A$480 (about £250m) in the 2018 financial year and A$360m (£187.5m) in FY2019.

To put that into context, the company brought in total revenues and other income of A$487m in the second half of 2015. Once the lenders are fed, the company will have just the first six months' takings (plus a spare A$7m) to pay wages and all other costs — before even thinking of making a profit. It's a sobering prospect.

Massive savings are going to have to be found from somewhere, yet at the same time earnings levels must stay the same or even increase. Fewer offices and staff must somehow increase their productivity.

And that is ignoring the increasingly tetchy elephant in the room: the shareholders.

Monday’s announcement noted almost in passing that dividends will not be paid this year. Investors who have seen their shareholding lose 90% in value in the space of a year, now won’t see a penny from it in the short term anyway. This is the worrying extension of an alternative business structure — a law firm not owned by shareholders but by banks.

Those shareholders won’t go quietly, either. Maurice Blackburn, one of the firms leading the class action on behalf of investors, has given malcontents until 20 May to join. The relevant period for making a claim has been extended to anyone who bought shares right up to 28 February this year (though it will have been an optimistic punter who would have done so on that date).

Somehow, Slater and Gordon must pay back massive debts, keep up income levels on reduced staff and see off potentially hundreds of angry shareholders wanting compensation.

Sure, this deal gives the firm breathing space. But the banks still have a tight grip on its throat.

John Hyde is Gazette deputy news editor