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The CEO of Slater & Gordon (ASX: SGH), Hayden Stephens, has stepped down as the embattled law firm reveals a major overhaul of its operations.
Effective immediately, John Somerville has been named as the new CEO, although Stephens will remain on the board as a non-executive director during the transition period.
The departure of Stephens is not the only major change for Slater & Gordon; an overhaul of the group's operations will also commence shortly.
Following an internal review, Slater & Gordon has announced the group will downsize the general law business by winding down or divesting the practice areas of Succession, Criminal, and Family Law. The group will instead increase its focus on Personal Injury, Class Actions and the Industrial/Union practice areas.
The group will also be shrinking its commercial litigation practice, whilst expanding its union services as part of its commitment to the Australian Trade union movement.
These structural changes to the embattled law firm come after a slew of problems revolving primarily around the group's failed business in the United Kingdom and a number of class action law suits brought by shareholders.
In November 2017, the listed law firm announced it was cutting ties with its loss-making UK business to focus on its Australian business.
In late October 2017, the Australian law firm called on its shareholders to vote in favour of a recapitalisation of its "unsustainable debt levels" to ensure it did not become insolvent. Splintering off its UK business was just one part of the recapitalisation process.
In September 2017, the company announced about 80 employees would be made redundant to cut operational costs.
Slater & Gordon posted a loss of $546.8 million for the 2016-17 financial year, coming on the back of the previous year's impairment-heavy loss of $1.01 billion.
The main cause of the company's fall from grace was the $1.3 billion acquisition of British professional services firm Quindell in 2015 which led to two class actions by aggrieved shareholders. One of these class actions was settled in July 2017 for $36.5 million.
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Business News Australia
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