Hammonds has followed through on its threat to sue a group of 14 partners who it alleges owe the firm money.
The firm filed a claim form in the chancery division of the High Court and simultaneously issued a press release informing the media of the claim.
“There’s going to be an almighty spat,” said an insider, "It's not a simple dispute.".
Hammonds managing partner Peter Crossley first threatened legal action in the pages of The Lawyer (April 9) after the group of former partners failed to agree to repay overdrawings from the 2004-05 financial year.
The firm asked partners for a total of £3m that was drawn during the 2004-05 financial year, in addition to repayments for 2003-04. The firm proposed a five-year repayment plan for the 2003-04 money.
Today’s press release read: “We have been working to reach an agreement with a number of our former partners to recover money due and owing to the firm. Regretfully we have been unable to resolve the matter with every such partner, and as a result we have today (11 June 2007) issued proceedings against 14 former partners.
“After a good number of months trying to reach an agreement, we now believe it is in the interests of all concerned that we bring the matter to a conclusion."
Hammonds are being advised by Alan Steinfeld QC of 24 Old Buildings. Most of the partners are being advised by Addleshaw Goddard.