As the supermarket concept developed in the UK in the 1950s, the appearance of brand names developed as well and were designed to be colourful, eye-catching and distinctive.

Buying a supermarket with a run down image and rebranding it was a popular pastime for investors. You only bought property, and a fairly low skilled task force, but the theory was that by rebranding your carrots with the name of a trusted retailer – perhaps washing them and upgrading the packaging – the customer, who still needed to buy a carrot near to home, would pay a tad more and you would ‘enhance profits’.

Fortunes were made on the stock market; entire chains of supermarket changed hands and were ‘rebranded’; the carrots were peeled for you; chopped into batons; mixed with some chopped up Kale and relabelled as ‘Stir fry’ for the busy housewife.

You can do that with carrots and bags of soggy yellow cabbages – but then someone decided that you could do the same thing with lawyers. Slater & Gordon went to the market for money for ‘acquisitions’; they were going to buy up law firms around the world and rebrand them. The future was golden.

However, lawyers are of many highly individual varieties; the David Price’s and Alan Collins of this world got to head up major firms because they were exceedingly good at specific areas of the law – and tempting though it may be to refer to them as vegetables…Whoops! Did I just suggest that a feared libel lawyer resembled a decomposing cabbage? Plough on, Ms Raccoon, plough on, perhaps he won’t notice.

The mistake investors made was in assuming that all ‘carrots’ are equal. That Slater & Gordon was just another publicly listed acquisition vehicle for rebranding and ‘piling it high’. They failed to register that in buying the legal firms, S & G were in effect paying the carrots to vacate the premises.

When Russell, Jones and Walker were bought by Slater & Gordon for £53.8M the expected turnover for the following year was predicted to be £53m, with earnings before interest, tax, depreciation and amortisation of £10.9m.

The 19 equity partners received £27.6M in cash initially, with another £8.8M promised provided they behaved themselves over the next two years. In addition they were to receive what was billed at the time as ‘£17M in S & G shares’ – but they couldn’t sell them for another two years. As of 1st of May, the equity partners are free to sell those shares. Those £17M quids worth of bonus shares are now worth less than half a million pounds split between 19 of them…

At the time of the deal, it was said:

All of RJW’s principals will ­continue to work in the new business [but] there were ‘no guarantees’ about whether the partners might then move on.

You don’t get to be an ‘equity partner’ unless you have spent years slogging away to build up your reputation and your law firm. Ipso, equity partners tend to be heading towards, or careering past, retirement.

If you had spent years building up your own company, and were of retirement age when someone came along and offered you a million pounds in hard cash for the company, and some shares – how likely would you be two years later, after watching those promised shares nosedive faster than an asteroid, to hang around and help the new owner recover the business from the hole he had driven it into? Hmm, me neither.

Which may explain the slight difference between the new accounts for Slater & Gordon (Australia) and Slater & Gordon (UK) – see if you can spot the difference between the UK accounts released a few days ago…

“The directors, having given consideration to the current financial forecasts for the group and the company, the engagement with the banking syndicate and its financial advisers, the comprehensive review and the performance improvement programs being implemented by management, consider the going-concern basis of preparations is appropriate for a period to 31 March 2017.“

Or the version from the February Australian accounts…

“The directors, having given consideration to the current financial forecasts for the group and the company, the engagement with the banking syndicate and its financial advisers, the comprehensive review and the performance improvement programs being implemented by management, consider the going concern basis of preparations is appropriate.”

The implication of the additional words ‘for a period to 31 March 2017’ is significant, because although there are rumours that Slater & Gordon may have reached agreement with ‘some’ of their bankers, currently owed a cool AUS$740 million, unless they reach agreement with all of them, they have to repay that AUS$740 by 31 March 2017….

Westpac Banking Corp, which is the leader of the Slater & Gordon syndicate, said its stressed exposure in property and business services increased by about $300 million. It is generally accepted among banking analysts that this refers to the Westpac exposure to Slater & Gordon. The notes to the table which disclosed this amount said it related to one client facility downgrade. That means Westpac has impaired the loan.

Westpac is also one of the major bankers impacted by the new ‘user pays‘ model to finance regulation. Banks, financial advisers and brokers would be hit with more than 80% of the regulators costs expected to reach $350 million this year.

Tough times ahead for Westpac and the other banks.

If I worked for Slater & Gordon, I would be very worried indeed.

But then again – if I held Slater & Gordon shares in lieu of part of the purchase price of my once respected company – I wouldn’t be cashing them in on the 1st May. I’d be hoping that S & G were so desperate for cash this time next year that I might be able to buy my old firm back for a fraction of the price S & G paid for it.

That’s me of course. I’m sure even vegetables aren’t as sneaky.