One of the biggest personal injury firms has returned to seven-figure profits after closing an office and chopping staff numbers.
Minster Law reported this week that profit before tax for the year ending June 2019 was £1.62m, on £35m annual turnover.
The profit figure was in contrast to 2018, when the firm suffered losses of £2.6m.
Accounts filed with Companies House show the firm, which closed its signature York office to consolidate operations in Wakefield, trimmed staff numbers by 15% to 464 by June 2019. This reduction was entirely made up of cuts to support staff, with the number of fee earners actually rising slightly to 230.
Chief executive Shirley Woolham said the results were a ‘tremendous achievement in tough trading conditions’, emphasised by the firm increasing gross profit margin to 36.1% from 31%.
The return to profit also appears to buck the trend in the personal injury market, as firms struggle through the effects of LASPO and fixed costs, ahead of Civil Liability Act reforms liable to restrict income from RTA claims.
‘Any business in our sector that has not borne down hard on its fixed costs faces a bleak future,’ said Woolham.
‘Our results are also supported by a 21% reduction in administration costs, driven mainly by our consolidation into a single HQ in Wakefield. The hard work of the past 18 months has paid off. Minster Law is an efficient, debt-free business with an ambitious strategy. We’re well positioned to accelerate our competitiveness in the market, further invest in our digital capability, pursue acquisition opportunities and diversify into new revenue streams beyond personal injury.’
Woolham said the firm was keen to talk to other market players about acquisitions where they make ‘long-term strategic sense’, and will also seek out strategic partnerships with suppliers.
The firm plans to create a broader legal services business to meet the needs of insurers and brokers, including entry into the legal expenses insurance market.
Woolham added: ‘We see a real opportunity to shake up the LEI market, which needs an injection of new ideas to help customers deal with the impact of the personal injury reforms. There will be more demand for legal expenses cover and insurers and brokers will want and need a more sophisticated solution that really works for customers.’