Medical negligence specialist firm becomes employee-owned

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Grayston: Firm can go from strength to strength

A law firm specialising in medical negligence has embraced employee ownership, giving the staff a “less risky future” at a time of uncertainty in the sector.

Julie Grayston, founder and managing director of Graystons, said the firm had rejected “plenty of approaches to sell or merge”, but neither approach would give you “control over what happens to your staff”.

Ms Grayston, who remains as a director, said 100% of the shares in the firm had been transferred to an employee ownership trust (EOT) and she would be paid back over a period of five to seven years.

“I’m still a fee-earner and I love what I do. This is a way to let the practice go from strength to strength and build from within.”

Ms Grayston said the law firm, based near Chester, had 15 staff – including, since the transition to an EOT at the end of May, herself.

As part of the move, Graystons has become an alternative business structure (ABS) and Lydia Brindley, solicitor and legal director, becomes a director of the firm, alongside solicitor Emma Fawdry.

Ms Grayston said she started thinking about an EOT several years ago from a succession point of view, wanting to ensure “some longevity and a less risky future for people going forward”.

When she launched the firm in 2000, “the risks were there, but they were not as great as they are now”, with fixed recoverable costs (FRCs) on the way for lower-value medical negligence cases.

It emerged earlier this month that the extension of FRCs to medical negligence claims worth between £1,501 and £25,000 that settle pre-issue may not happen, as scheduled, in October this year, due to delays in finalising the rules.

Ms Grayston said the law firm’s small size meant that it could “adapt to any change”.

She went on: “We have seen an awful lot of change since 2000. You’ve got to adapt and put in processes. We will continue to deal with the cases under £25,000, if we’re able to, without cutting corners.”

Ms Grayston said lower-value claims often involved the death of babies, old people, or those with mental health problems. “How do put a value on that?”

She said small law firms could be “very careful” in their financial management – how they managed their overheads and spent money. “Big is not beautiful. Your expenses expand as you expand.”

Ms Grayston said she had been talking to everybody in the firm about becoming an EOT for over a year and everyone was involved: “We’re all invested in our own destiny.”

She had anticipated that the EOT would go live in December last year, but the process of becoming an ABS, which is essential as the EOT becomes a non-lawyer owner, took longer than expected.

Since the transition to employee ownership had “taken a little bit longer than we hoped”, it was decided that staff would get their first bonus payments early. “It’s a way of saying ‘thanks for bearing with us’. We got there.”