Lifeline for struggling law firms
26 Sep 2011
Law firms who are having difficulties continuing to practice can now register, free of charge, with a new service designed to put them in touch with firms seeking to merge with or take-over other practices.
The 2011 – 2012 practising year is likely to see many firms struggling to survive. The increasing cost of professional indemnity insurance combined with rising costs, reductions in publicly funded work and the general decline in instructions will be compounded by the entry into the market of the Alternative Business Structures (ABS) who will, inevitably, take work from traditional firms.
It is inevitable that there will be an increase in the number of solicitors wanting to get out of the law and inevitable too that firms will want to merge, sell up or even close down.
Whilst many will be happy to use agents to dispose of their practices, many are suspicious of them or will take the view that they owe enough without taking on yet further debt.
To assist those firms who would like either to dispose of their practice or merge with another firm, the Lawyers Defence Group has created a free Practice Register. Here firms seeking to dispose of a practice or those seeking to acquire another practice can register their interest and be put in touch with firms likely to be of interest to them.
Duncan Finlyson, a solicitor specialising in regulatory and practice development issues and the manager of the Lawyers Defence Group stated:
“The market for legal services is not only a finite one; so far as high street practices are concerned it is currently a contracting one. The advent of the ABS will inevitably take work away from the traditional practice. For many, that may amount to the difference between success and failure, survival or closure.
There are many potentially viable practice; they just need to operate in a more cost-effective way by merging processes and reducing overheads. The Lawyers Defence Group Practice Register gives them that opportunity – the ability to find a partner with whom to share those costs.”
Richard Nelson, senior partner with Lawyers Defence Group firm Richard Nelson LLP, commented:
“Essentially, the service is there to address what we have perceived to be a growing demand. Unless something is done to assist those firms that can no longer continue to operate then there will be a rise in the number of failing firms, an increase in the number of bankruptcies and insolvencies and inevitably an increase in the number of firms who are intervened in or solicitors who commit fraud.”
In submitting details to the register, firms will not be committing themselves to anything – merely opening up the opportunity for a dialogue. The Lawyers Defence Group will then try and put them in touch with an interested party if there is a suitable match.