PI market set to shrink
Hundreds of firms specialising in personal injury could be whittled down to barely a dozen within five years according to a report in the The Law Society Gazette.
The report relays the prediction of Steve Din, the founder of law firm investor Doorway Capital, who forecasts a rapid consolidation of the market driven by imminent reforms of the sector.
Doorway recently acquired the debts of Simpson Millar owner Fairpoint and Din revealed the risk capital investor has substantial funds available to make further purchases.
Speaking at a PI conference, Din said, ’Of the 800-plus specialist PI firms presently in the market, consolidation appears not only likely but, for us, represents a real opportunity.
‘We consider this opportunity will also encompass non-PI consumer law firms. We believe Doorway Capital can force this consolidation by focusing our investment at making acquisitions, making lateral hires and investing heavily in direct marketing.’
Din, a former managing director at Morgan Stanley and Citigroup, told delegates that some High Street banks are expected to retrench from funding small personal injury firms, leaving them to focus on funding just the larger firms.
He added that smaller claims management companies (CMCs), particularly those that depend on RTA claims, would largely disappear, with the larger surviving CMCs becoming an alternative business structure and possibly integrating with a law firm.