Clarke Willmott gets separate funding for PI practice as new figures show growth spurt

Clarke Willmott has broken new ground by arranging a separate funding facility with its bank, RBS, for its burgeoning personal injury (PI) practice. The move is an acknowledgement of the practice area’s recent growth at the firm and the nature of PI work generally.
The funding, established in the current financial year, is based on a proportion of the value of the work in progress (WIP) Clarke Willmott is carrying on PI. “If the WIP on PI matters is x million,” said managing partner David Sedgwick, “the bank will provide us with cash up to a proportion of that figure, with no questions asked.”
PI accounts for around 25 per cent of Clarke Willmott’s £21.9m turnover, with average WIP across the firm standing at 181 days. The specific figure for PI is likely to be much higher, and so with the PI turnover running at around £7m and growing, some £4m or more is estimated to be locked up. The RBS funding will be based on that figure, although Sedgwick refused to comment on the size of the facility.
Sedgwick said that the nature of PI, with years between instructions given and payment received, no opportunities for interim billing, and costs incurred throughout the matter, such as disbursements for clients and lawyers’ salaries, meant that it was increasingly being treated as a separate part of the practice in financial terms. He added: “Even a successful practice like ours, which is still growing, tends to suck cash out of the business.” He emphasised, however, that in all other respects, Clarke Willmott remained unified.