The firm's pre-tax losses rose to £14.4 million from £6.3 million the previous year
UK law firm Simpson Millar’s pre-tax losses more than doubled in 2023 as turnover fell by 39 percent, partly due to exiting private client markets, The Law Society Gazette reported.
The firm said its pre-tax losses rose to £14.4 million from £6.3 million the previous year. Its annual accounts for the year ending December 2023 also show a steep 39 percent drop in income, with turnover falling to £19 million as the firm shut down parts of its business to reduce costs.
Simpson Millar’s decision to exit private client markets over the past two years incurred a significant financial impact, costing around £1.8 million. In addition, the firm reduced its workforce by 27 percent in 2023, with staff numbers dropping to just under 392 across seven offices.
By the close of 2023, Simpson Millar reported net liabilities of nearly £28 million, more than doubling from the previous year. The firm’s assets dropped to £40.5 million, with unbilled income decreasing by 23 percent to £14.5 million, only slightly exceeding the total losses for the year. Meanwhile, the firm’s total owed liabilities jumped from £56.5 million to £68.3 million by the end of the year.
Despite the mounting losses, the firm made a strategic acquisition in March 2024. Simpson Millar’s parent company, Doorway 4 Law Limited, acquired the trade and assets of Southampton-based law firm Novum out of administration for £266,000 in cash, with a further £1.2 million to be paid based on future performance.
Simpson Millar’s relationship with Doorway 4 Law dates back to 2018 when the firms entered into a £25 million loan agreement, which was extended to £30 million in 2023. Doorway 4 Law has provided a “letter of comfort” confirming that financial performance covenants have been waived, eliminating the need for financial metrics that the firm would not reasonably be able to meet.
The company attributes its falling turnover to ongoing delays in case resolutions stemming from the pandemic and difficult market conditions. Looking ahead, Doorway 4 Law’s strategic plan focuses on consumer legal services, with investments in marketing, workforce engagement, and productivity enhancements. The company also aims to improve margins by reducing costs across the group.
The firm’s board expressed confidence in achieving these objectives, stating that the adjustments will provide a strong foundation for future revenue growth and position Simpson Millar to capitalize on potential market consolidation in the legal services industry.
