The Law Gazette recently published an article outlining that the Solicitors Regulatory Authority (SRA) had done research that showed that more than 30 of the top 200 UK law firms are in serious financial difficulty.
The regulator is in what it calls ‘intense engagement’ with 160 firms at risk of failure, of which eight are in immediate danger.
Legal firms have had various challenges recently most importantly from the new Legal Services Act (LSA) that allows non solicitors to own legal practices. The LSA will no doubt lead to increased competition especially for small high street firms.
Traditionally law firms have not been particularly good at collecting cash in as much of the work is in progress and a focus on billable hours sometimes means that debtors do build up.
So if your practice is, or you are
- Experiencing cashflow problems?
- You are concerned about paying your professional indemnity premiums?
- worried that insolvency may affect your ability to practice in the future?
- You don’t want to risk the SRA Intervention
If so then you should read our pages on help for lawyers with cashflow problems
We are currently helping a law firm with 20 partners
- We have negotiated a standstill with the bank £4m (no capital or interest payments)
- We have negotiated a time to pay their tax with HMRC (£1m)
- We helped them exit a property
- NO FORMAL INSOLVENCY used
- But we built and used a full statement of affairs to show the outcomes for all creditors, if we did use formal insolvency. This was particularly helpful in the negotiations.