Protection of Interests in Law Firm Closure

Armstrong Watson was engaged by Genus Law Limited to find a firm to acquire the ongoing matters, client relationships and successor practice status; monitor compliance and lead on interaction with the SRA; and to ultimately liquidate the business.

Challenges

Although we have a lot of experience, it’s never easy dealing with a closure of a law firm and there are multiple stakeholders to consider such as employees, clients, the SRA, insolvency legislation, Companies Act requirements and the list goes on! Paramount however was finding a suitable home for the ongoing legal work of the clients. We were able to do the entire transaction (from notification, through the SRA and insolvency legislation to transfer of ongoing files) within a month. As the only firm of accountants endorsed by the Law Society, and with a significant insolvency team we were ideally placed to deal with all of the various factors quickly – as we have done with other closing law firms in the past

What we did

From initial appointment (late in the evening one Monday night) through a very short window (just five weeks) before potential intervention by the SRA, it was the hard work, responsiveness and attention to detail of our Legal M&A team which allowed for a very speedy sale process. Utilising our network of established law firm buyers and brokers, we received 40 expressions of interest and 5 indicative offers inside a fortnight.

The preferred bidders were all invited to meet the directors before confirmation of a final bid. This ultimately led to the negotiation and completion of a sale and purchase agreement, enacted late one Friday night. Armstrong Watson was the lead advisor for the sale and was also able to keep other parties (e.g. the SRA) informed throughout.

Ultimately our insolvency team also then processed the liquidation of the company once the client matters had been transferred, but our joined up approach with them throughout ensured that this phase ran seamlessly, immediately after the sale.

Results

We are delighted that all of the Genus clients were protected, with continuing legal service provision; that appropriate value was received for the closing business; and that many of the staff have found new roles. Therefore whilst the ultimate result for the business was liquidation, as far as possible, all stakeholders were protected.