Navigating financial distress for law firms

Protecting your practice, partners, and professional reputation during periods of financial distress.

Our dedicated Legal Sector team provides specialist advice tailored specifically to the UK legal market, offering deep insight into the financial, regulatory, and operational challenges that modern practices face. 

Law firms are not immune to financial pressures. Whether due to declining revenues, rising PI insurance premiums, key fee-earner departures, or locked-up capital, financial distress can escalate quickly. Our restructuring and insolvency professionals provide the objective expertise needed to protect the firm’s future.

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1. Early Diagnosis and Strategic Turnaround

Our restructuring experts bring a fresh lens to assess a firm’s financial health. By conducting a robust review of performance, forecasts, and assumptions, we work with you to:

• Develop a tailored turnaround strategy.
• Identify and rectify "lock-up" and Work-in-Progress (WIP) inefficiencies.
• Mitigate personal risks and liabilities for partners and directors.

2. Stakeholder Management and Regulatory Compliance

Most law firms have complex stakeholder relationships including partners, lenders, creditors, and landlords. Crucially, we understand the SRA (Solicitors Regulation Authority) implications when a firm is in financial difficulties and are able to provide guidance. We manage these relationships to:

• Ensure transparent communication and preserve trust.
• Assist in maintaining regulatory compliance during a period of change.
• Negotiate with lenders to restructure existing facilities

3. Cash Flow Stabilisation

The immediate priority during financial difficulty is cash flow stabilisation. We assist firms in regaining control through:

• Debt restructuring and refinancing.
• Negotiating Time to Pay (TTP) arrangements with HMRC.
• Agreeing repayment plans with key creditors and identifying urgent cost-saving measures.

4. Accelerated Mergers and Acquisitions (AMA)

Our team is well-versed in finding purchasers or merger partners when there is a limited window to complete a transaction. Whether conducted on a solvent or insolvent basis, we focus on preserving the value of the practice, protecting client files, and ensuring a smooth transition for staff.

5. Formal Insolvency Options

If a solvent restructuring is not viable, our Licensed Insolvency Practitioners guide firms through formal processes, including:

• Administration: A rescue procedure designed to preserve value and jobs.
• CVAs (Company Voluntary Arrangements): Allowing the firm to repay debts over time while continuing to trade.
• Liquidation: An orderly wind-down when no other rescue path is available.