Slater & Gordon’s management became aware of information that would have “a material effect on the price or value of its securities” a week before telling investors it would not meet its earnings target.

Responding to queries from the Australian Securities Exchange, the company said draft results from its poorly performing British operations had circulated among executives late Wednesday two weeks ago.

The law firm only ditched previous earnings forecasts last Thursday, a week after executives saw a draft of the figures.

Confidence in the company’s management, led by Andrew Grech, had already weakened in November after warnings it was “now a likelihood” the law firm would have negative cash flow of up to $40m for the first half of the year.

Despite this, the company repeatedly reaffirmed of $205 million for the financial year, a claim most market analysts suggested would be difficult if not impossible to achieve.

The law firm said the information took more than a week to be released because it was “internal management information, which, without verification, was insufficiently definite to warrant disclosure”.

“Specifically, it was necessary to undertake a fulsome assessment of the information in order to determine whether or not the information required the company to revise (its guidance),” Helen Vines, the company’s general counsel, wrote to the ASX.

However, Slater & Gordon said on Thursday that a review initiated by incoming chief financial officer Bryce Houghton and other independent advisers had led to a “reconsideration” of guidance.

It has not disclosed a new guidance forecast.

Shares fell more than 17 per cent on that announcement, following a long period of decline starting in June, after reports the Australian Securities & Investments Commission had questioned some of the company’s financial reporting.

Shares have fallen more than 80 per cent since June. Shares in Slaters this morning opened 5 per cent lower at 79 cent each.

Slater & Gordon, which is well-known for its class action litigation against major Australian companies, could itself be the target of a lawsuit.

ACA Lawyers said last week it was examining whether investors had a claim against Slater & Gordon, largely related to big changes in the earnings guidance and the way the firm raised $890m for its ill-fated takeover of British firm Quindell.