Big Four professional services firm EY has decided to close a legal bolt-on firm just five years after snapping it up.
The company announced yesterday that EY Riverview Law would cease to operate as an independent entity and that existing client engagements would transfer to the EY UK business.
A spokesperson added: ‘As a result of this decision, regrettably, a number of employees have been subject to a formal redundancy consultation process. EY is supporting affected employees to explore other opportunities in the organisation.’
It is understood the only UK legal redundancies planned by EY are in Riverview Law. Reports on Monday suggested that legal staff would partly make up the 150 people earmarked for redundancy, but EY insists it is only Riverview staff affected in legal services.
The deal to acquire Manchester-based Riverview Law in August 2018 had been heralded by EY at the time as helping to establish its place as a ‘leading disruptor’ of legal services.
The move was intended to enhance and scale the EY Law legal managed services offering and to help clients to increase efficiency, manage risk, improve service transparency and reduce costs of routine legal activities.
Riverview Law, previously led by Karl Chapman, had marketed itself as a fixed-fee provider for blue-chip clients and had placed a strong emphasis on technology.
Accounts from 2020 show that Riverview had received loans worth almost £6m, to be repaid over the next five years, from parent company EY Melbourne Holdings Ltd.
Riverview’s annual financial report for the year ended July 2022 showed that it made a profit of £260,000 – down from £791,000 the previous year.
Dividends to directors were slashed from £945,000 to £260,000. Revenue had dropped from £5.57m to £4.67m and staff numbers by the end of the period had dropped from 85 to 67.