TROUBLED law firm Slater and Gordon has agreed to a massive $36 million settlement with its own angry shareholders.

The business announced today it would reach a conclusion via Federal Court mediation with one of the class actions brought against it.

Thousands of shareholders, led by investor Matt Hall, launched the action after years of financial upheaval at the firm.

They were seeking compensation for the significant loss of the business' value, after its $1.3 billion acquisition of a British professional services business in 2015.

Lawyers from rival Maurice Blackburn, acting for the shareholders, brokered a settlement deal on Monday.

"The conditional in-principle settlement will ... resolve any and all potential shareholder claims against the company and its directors and officers," Slater and Gordon said in a statement this morning.

Fairfax Media reports the value of the settlement is $36.5 million. The law firm said the settlement will involve no admission of liability.

It paves the way for a proposed restructure of the business.

Managing director Andrew Grech has stood down - although he remains on the board - and all other directors prepare to follow in his steps after agreeing to the renewal process, a spokesperson said.

A replacement board will be appointed by the new lenders, led by majority debt holder, Anchorage Capital.