Yeah sorry I should have been more specific haha. Here is an excerpt of the type of post I'm talking about in relation to SHJ/SGH (apologies to anyone who has already read this):
I'm relatively inexperienced when it comes to trading/investing. I have a sum in an index-tracking fund which is my nest-egg but I use smaller amounts to trade with for fun.
I work in a PI firm.
Here is what I can tell you about generating revenue, and why asking how much a case is worth is like asking how long is a piece of string:
- WIP is only good if you retain the file through to settlement/judgement. If the case is taken over by another firm mid-way through, even if you have time-billed (for example) $10,000 up to that point, you are unlikely to receive that full amount and will be asked to reduce your fees at settlement as the new firm will have had to incur expenses just coming up to speed;
- The biggest cash-cow for plaintiff firms like us, and Shine, SGH etc are CTP claims. Car accidents. Forget workers comp, public liability etc. They are space-fillers. Car accidents are where it's at, (so watch for legislation changes in this area in particular);
- Legal fees vary wildly depending on: severity of injury, amount of work involved, which insurance company (which affects how easy it is to settle), circumstances of the accident etc;
- That having been said, even a minor whiplash injury can net a firm $15k + GST in fees if done properly, and can have a quick turnaround.
Id' be happy to answer any further questions, but my summary of the situation is this:
- It is near-impossible for personal injury firms to calculate with any real certainty exactly how much they will make. To do so is almost an exercise in futility BUT, it is not unreasonable to assume that as long as you are bringing in new clients, and as long as files are progressing, you are going to be rolling in revenue. The way I do the reporting at my firm, we don't even look at WIP, we just look at base-line numbers. E.g. 100 MVAs (motor-vehicle accidents) might average out at $10k in fees a case;
- Regarding success rates, most PI firms would have success rates in the high 90%'s. How do I know this sweeping generalisation is true? Because it has to be true by definition. The whole point of "no-win no-fee" is that we do not take on cases we think won't "win."
- IMHO even though I realise a publicly listed firm has to play by different rules and offer investorssome kind of answer as to what WIP is worth, it is an inappropriate and almost irrelevant measure of an insurance-firm's intrinsic value.
P.s. even the concept of "winning" these cases is a misnomer because, as anyone who does it knows, if the insurer accepts liability it isn't a case of will you get anything, it's simply a matter ofhow much you will get.
@bensterz so that was one of my posts on the topic ^^. I don't pretend to be an accountant, it's not my job to read through the forward projections etc and reconcile them with our overheads and work out people's salaries etc. That particular job falls to other people; however, I am directly responsible for working out how much money we're making and trying to project how many settlements we might have in coming months etc. My basic observation is that it seems all of the traders/investors on HotCopper are hung up on WIP and what it means for the firm and how it's calculated and bla bla bla. All I'm saying is that, in the context of PI, it can very often amount to nothing at all.
Let me make myself absolutely clear: the main point I am trying to convey is that the amount charged for legal fees is quite often totally arbitrary. Not sometimes or even occasionally. I mean often.
People can take from that whatever they like. I'm no master-investor, I can only talk about SGH and SHJ because I know these things!
Peace.
SGH Price at posting:
59.0¢ Sentiment: Sell Disclosure: Not Held
