One of the biggest personal injury law providers in the country says its outlook is positive despite reporting falling profit and turnover.
According to results published last month, national firm Lyons Davidson posted a post-tax loss of almost £3m for the year ending 31 May 2017 after a year of consolidation and restructuring.
That figure was partly distorted by £4.3m dividend payments to insurer partners, which were treated as interest payable and showed up in the financial statement. But in any case, operating profits year-on-year fell from £4.06m to £1.1m and turnover dropped from £44.47m to £41.9m.
Managing director Mark Savill said the firm has responded well to the challenges across the sector, and that profit falls were in line with expectations. ‘We have been implementing a strategy to mitigate the changing profile of our work over the last 12 months, which has meant making some challenging changes to our business,’ said Savill. ‘These developments are delivering positive results and have put us in a strong position for the future.’
Restructuring over the past year has resulted in the closure of some smaller offices. The firm retains seven offices across the UK and in 2017 increased staff number from 811 to 831.
At the same time, the firm invested in digital services to the extent that some litigation teams interact with 70% of clients through a self-service portal.
Directors’ remuneration came to £571,000 in 2016/17 – down from £628,000 the year before – but the remuneration for the highest paid director increased from £163,667 to £220,000.
Savill said the firm has maintained a strong market position. ‘We are already seeing improvements in our financial performance, as we adapt with the changing needs of the insurance market and develop new products and services.’
Lyons Davidson has been at the forefront of creating new business models to adapt to the changing landscape in PI. Joint business ventures have been entered into with insurers LV= and AA, although both proved to be shortlived, with LV= pulling out of the legal services market last September.
Lyons Davidson also bought some of the claimant division of Cogent Law and the Parabis joint venture with Saga Law in a £500,000 deal after Parabis entered administration in 2015.
The firm is one of many likely to be affected by the Civil Liability Bill, which will ultimately reduce whiplash damages and remove the recoverability of costs for RTA claims up to £5,000.