Listed law firm Ince is undertaking a fund raise to bring in £8.6 million, amid financial difficulties and a crashing share price.
The firm announced on the London Stock Exchange on Thursday that the amount was required to implement a “cost rationalisation programme” and would comprise approximately £7 million in newly issued shares and a bank loan of £1.6 million.
The statement added that the firm has identified further cost savings of “£4 million across the Group which can be accelerated with the proceeds of the Fund-raising”, including “potential for a reduced overseas footprint, review and rationalisation of non-core business streams, further property rationalisation and headcount reductions and tighter control of overhead costs.”
The firm’s share price plummeted by over 50% following the announcement, from 12p to 5.45p at the time of publication.
The firm also announced that the current CEO Adrian Biles will resign and be replaced by Donald Brown, executive director of the company and CEO of Arden Partners – Ince’s financial adviser, which Ince agreed to acquire last year.
Highlighting the need for additional funds, the firm said that its operations in Hong Kong were “under review”, as its investment in its team had “produced substantial revenues but this has not led to similar cash returns”.
The statement added: “Without the Fund-raising the Group will face financial difficulties and the Company will need to look to alternative sources of funding in the short term which may not be readily available or so advantageous to the Group or its Shareholders.”
Ince also cited a cyberattack on the firm which took place earlier this year, which the firm partly blamed for a dip in revenues in May, as a major factor behind its decision to undertake the raise. In its trading update, the firm said it had now “assessed the full impact of the cyber-attack and the Board currently estimates that the cash impact on the Group will be approximately £4.9 million”.
The firm also said in its Thursday statement that it now anticipates that its audited accounts for the last financial year will be delayed until September, “largely” due to the impact of the cyber-attack”.
In May, the firm’s firm’s unaudited revenue for the period was approximately £97 million, which was a decrease of just over £3 million on 2021.
The firm has had mixed success in recent years, including a fluctuating share price and senior members’ departures. In 2021, Ince’s U.K. managing partner and global head of consulting Mark Tantam departed the firm to set up his own non-legal advisory firm.
However, the firm has expanded its ranks in recent months in London, including with the addition of former Slaughter and May partner Oliver Storey, who left the elite firm after an investigation.
Ince also hired Locke Lord’s former London managing partner, James Channo, in February 2022.
The firm was heavily criticised in June by the owner of a restaurant which hosted a group of senior Ince Group executives earlier this year.
Lee Skeet, owner of Cora restaurant in Cardiff, accused John Biles, the firm’s former head of finance and administration of mistreating one of his front-of-house employees, claiming that she was “talked down to, disrespected, and touched unwantedly by members of [the] group”.
Skeet later told Law.com International that the group, which consisted of six people including members of Ince’s management board, were “loud, obnoxious, rude and disrespectful” during the evening.
He also dismissed an internal investigation undertaken by the firm as a “token effort”.