'First of many' say administrators as regional law firm is sold in pre-pack deal
Top 75 UK firm is created preserving up to 420 jobs after McMillan Williams Solicitors sale
A business advisory practice that specialises in the mid-market has predicted a wave of law firm failures after completing the pre-pack sale of a leading regional firm.
Croydon-based McMillan Williams Solicitors (MSW) was sold to Taylor Rose today (20 May) as part of a deal that will preserve up to 420 jobs and create a top 75 UK law firm with revenue of around £45m.
In a statement, the firm’s joint administrators, Sean Bucknall and Andy Hosking of Quantuma, said ‘historic aged debt has placed pressure on cash-flow', a situation that was exacerbated 'as a direct result of Covid-19’.
The firm was sold to Taylor Rose as part of the UK’s pre-pack process, which allows companies to sell all or part of their assets to a pre-determined buyer before going into administration.
Bucknall said the sale was the “best possible outcome for the firm and its creditors” after it failed to secure additional working capital to “weather the current economic climate”.
“The high fixed cost base and highly leverage model of many law firms leaves them particularly vulnerable to the fall-out from the Covid-19 pandemic,” he added.
“We are already seeing many law firms already in serious financial difficulty and unfortunately this administration will be the first of many.”
The acquisition boosts Taylor Rose’s network to 32 offices with their combined property law capabilities creating a top 10 residential conveyancing practice.
MSW also brings litigation, crime, family and private client capabilities to the firm. Its strategy of building a regional network echoes that of listed regional firm Knights, whose chief executive David Beech was this week named in The Sunday Times 2020 Rich List with an estimated fortune of £130m.
Taylor Rose chief executive Adrian Jaggard said: “I am very confident that together we can maximise the opportunities of our combined business. Our resulting strength leaves us well placed to benefit as the Legal Services Market starts its journey of recovery from the stresses of the pandemic.“