The executive director of the Solicitors Regulation Authority (SRA), Richard Collins, talking at the SRA Conference in Birmingham has warned that many firms of all sizes are vulnerable to failure unless they change their businesses.
This warning comes soon after the London Firm, Manches, became the latest top 200 firm to fail. Penningtons acquired the firm in a pre pack deal which at least ensured the 265 jobs were saved. Of course the problem will be that some lenders are going to be more reluctant to lend to lawyers who have in the past been regarded as pretty safe investments.
Collins said; ‘We’re seeing firms people always felt would have been safe but they’re exiting the market in a disorderly way in a moment of crisis,’ he said.
‘It’s even more important for firms to have robust plans about what is the future of the firm. This is an issue affecting firms in the top 100 - it’s no longer inevitable firms of a particular size will survive, the market will not let them.’
The SRA chief executive, Anthony Townend said that a pre-pack administration is a preferred option to intervening in the case of financial distress.
What about a CVA?? This can also help a law firm restructure and survive. For more information on how KSA Group can help with pre pack administrations or CVAs refer to our help for lawyers pages. which contains case studies and lots of information.