Categories:North West

Halliwells’ assets up for grabs as firm files to go into administration

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  • A sad but inevitable tale. Whilst senior personnel will parachute into Hill Dickinson, no doubt junior staff who had no part in the firm's demise will struggle to find employment elsewhere.

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  • If Halliwells are thus affected, and the prospects of a recovery is now looking to be akin to Japan in recent decades, e.g. 5-10 years at least post-crunch, just how many other firms in the "Legal 200" are going to have to do a Hogan Lovells, SNR Denton to stay alive?
    The legal landscape is going to be mutilated by a failure to regulate our lending infrastructure since ders were popularised by Salomons in the 80s.
    Let us hope that future lawyers are still encouraged to join the profession and not put off by the even stiffer competition they will now inevitably have to fight against.
    The lawyer of tomorrow may be more of a US firm attorney, covering several areas, and contentious/non-contentious to boot, to allow them to flourish.
    The niche firm/boutique or sloth are going, going...

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  • On a personal level, we are sad for the people affected by this at Halliwells. It was a well established Manchester firm and we have worked closely with them over the years.
    On a structural level, Halliwells’ demise throws up some interesting partnership issues. Firstly, it shows that the recession can affect the legal market as much as any other. It's too early to know exactly what happened at Halliwells, but it seems they took on too many costs without sufficient income to cover them. In any market over-expansion at the wrong stage of the cycle can be catastrophic. Partners in firms need to ensure that their business model is sound and that their drawings do not exceed their earnings. Some of the vitriolic comments posted on blogs following the announcement, coupled with some of the well publicised departures from Halliwells, may also point to issues surrounding the culture and values of the firm.
    Hill Dickinson and BLG are rumoured to be interested in acquiring Halliwells' assets. The Spinningfields lease may be regarded as more of a liability than an asset. The TUPE costs of transferring staff, especially when corporate departments are not fully occupied, may also not appeal. That leaves Work in Progress, although Halliwells' clients may not be rushing to pay any outstanding bills.
    The partners (or members as we should properly call them) will be pleased Halliwells is an LLP although we don't know whether RBS took any personal guarantees from members when they refinanced the business.
    This is a sad story for Halliwells, the people who work there and Manchester’s legal sector, but it seems that Halliwells’ problems relate more to business strategy and management rather than anything to do with the legal sector. More will no doubt come to light in the next few months.

    Mark Briegal
    Partner and Partnership Law Expert
    Ralli

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  • The desire exhibited by many such firms to obtain very expensive corporate premises seems to me to be nothing more than empire building or possibly the worst kind of phalanx symbol. In my experience flash buildings & cars do not impress clients as much as some would like to think.
    I feel desperately sad for those employees who's futures remain uncertain & who never brought about this firms demise

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  • "It's too early to know exactly what happened at Halliwells, but it seems they took on too many costs without sufficient income to cover them."
    Expert comment if ever I saw one - and FOC. Any more ?
    "Partners in firms need to ensure that their business model is sound and that their drawings do not exceed their earnings."
    This really is radical thinking for the legal sector. Personally I'm not sure it will catch on.
    What next - "if you borrow money expect to have to repay it". Nah - have to draw the line somewhere.

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  • Is there no Lawyer with the midas touch that can turn things around for Halliwells?.

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  • Very sad. A friendly and progressive firm, always ready to listen and lend a hand. Always placed client priorities above all and the senior partner and his colleagues always treated one with respect and friendship. Good luck to all at Halliwells!

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  • Time for stagnation and "emu-syndrome" is over.
    The modernist lawyer must be holistic in approach and ability within their legal practice.
    An appreciation of finance, HR, marketing, and legal ability, are going to become mandatory for each and every lean "six-sigma"-type lawyer/counsel/solicitor/barrister.
    Shedding all unnecessaries is vital if any law-firm is to thrive. There is a lot of procrastination and not enough action in the attitude of lawyers today. Aiming for that pint at the end of the day may be the ambition of some, but they will be swiftly bled out.
    What we are experiencing is Darwinian, and those that are savvy enough will make it through.

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  • Just wondering whether Halliwells had negotiated any rent free period at all and if so why this had not mitigated any choppy patch? Good luck on the other side but let's hope they don't bring anyone else down with them.

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  • a rent free period = smaller reverse premium.
    Strategy
    1. Negotiate a reverse premium of £21M

    2. Ensure the money is paid to the equity partners rather than into the LLP and justify this by claiming it was the most tax efficient way to do it.

    3. Borrow £18M from the RBS

    4. Fail to tie in the equity partners who received between 200k and £1M from the "property windfall" despite them not being subject to any restrictive covenants

    5. Watch the equity partners leave as the profits dwindle due to the costs and debts associated with the property/debt inducing windfall

    6. Enter administration

    Genius

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  • Its a shame a lot of these firms only ever give out their turnover and pep numbers. I would suggest a more suitable number to be comparing is their cash and overdraft numbers. We have seen with Halliwells that you can have all the turnover numbers you want, but if you aint got the cash it doesnt mean anything.

    Is there no place in the upcoming lawyer 200 survey where they can mention cold hard cash ?

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  • Is there any truth in the suggestion that existing partners are threatening litigation against their own board?

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  • Why take on people who have so demonstrably failed in the legal business world?

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  • Typical British management - greedy and selfish, and never mind what mess you leave behind for lesser mortals to pick up the pieces.

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  • I walked past there not that long ago. There was a big party going on in their lavish foyer. The bar was packed. Lots of entertaining going on. I couldn't believe it when I read that the firm had gone bust a few weeks later. Somebody obviously wasn't keeping their eye on the ball.

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