Preston firm completes MBO after entering administration By Joshua Freedman 27 February 2013 10:47 17 December 2015 14:30 Sign in or register to continue reading. It's FREE Sign in Email Password Keep me logged in Forgot your password? Not registered? It's FREE! Register now Register with The Lawyer Anonymous 27 February 2013 at 11:57 In which parallel universe is an insolvency event described as “in line with our strategic development plans”? Reply Link Anonymous 27 February 2013 at 17:17 This is an absolute disgrace. It’s now getting to be normal practice for firms of solicitors to abandon any sense of financial irresponsibility, then when it all goes pear-shaped just dump the debtors and do a pre-pack. What incentive is there for firms to behave responsibly any more? No doubt these insolvent firms were the very ones that were undercutting only recently in order to try and stay afloat, thereby causing unfair competition and financial problems for their properly run rivals. It’s quite wrong that the partners in such firms can walk away from their creditors, when partners in unincorporated forms, who actually take responsibility for their financial decisions and accept liability for their debts, would be made bankrupt in a similar situation. I just hope that local businesses will treat the newco in the same way as they would treat a phoenix double glazing or used car sales company. And I totally agree with the previous comment – if `strategic development plans’ means a planned insolvency then God help us all. Reply Link Anonymous 27 February 2013 at 17:43 No doubt the creditors of the old company will be delighted with the comments of the CEO. A great advert for non-lawyers running law firms. Reply Link Anonymous 28 February 2013 at 09:03 This is a lamentable lapse of the probity we used to take for granted. Of particular concern is that this will taint solicitors who put their client’s interests first rather than concentrating on how much income they can earn. How can the public have faith that personal interest is not affecting the advice they are being given? It is significant that this firm put a marketing manager in charge. The pathetic spin being put on failure suggests that they have no remorse which is of concern given that the same people remain in place. Professional governance is in disarray and the deafening silence from the SRA says it all. Reply Link Anonymous 1 March 2013 at 08:47 I think the commentators here who think that this is a disgfrace should consider whether the alternative of SRA intervention and 80 job losses is a better outcome. For those who know anything at all about the process and difficulties with law firms in this position, they realise that a pre-pack is often the only option which preserves the business and allows at least some return to creditors whilst protecting the interests of clients. The fact that a law firm finds itself in difficulty normally has more to do with the worst financial crisis since the 1930’s rather than incompetence or lack of probity. Reply Link Anonymous 1 March 2013 at 12:24 I disagree. Of course the firm will find itself in difficulty if the partners are continuing to award themselves bigger wage rises each year, when the firm are struggling in this financial crisis. I wonder how many of those other staff got such large pay rises last year? Not many, if any, probably. Parallels with bankers? Reply Link Anonymous 1 March 2013 at 21:22 The last commentator has identified the problem here. It is either incompetence or a cynical reliance on the protection from personal consequences of the LLP which causes partners to take huge increases in their drawings while the firm goes down the pan. If there was probity then we might expect humility. Instead we get the absurd claim that this was a smart commercial move. With probity we could might expect partners to pay back the profit they earned on the back of people who have lost money. This is indeed a disgrace. Reply Link Anonymous 6 March 2013 at 17:19 The banks will be taking note of the the frivelous use of pre-packs and we’ll all suddenly be back personal gaurentees if we are not careful. Reply Link Geordie 7 March 2013 at 11:22 I do not know the personal circumstances surrounding this particular pre-pack and for that reason find that I cannot be critical of those in charge of the previous and now defunct firm. So I find it surprising that others find it so easy to accuse the partners/managers of rewarding themselves ahead of others. Unless of course those other commentators on here have far more inside knowledge of this firm and others in similar situations. In which case I bow to your suprior knowledge. Reply Link Terry L 11 March 2013 at 02:34 I think you will find that many suppliers of services to law firms (medical agencies, referrers, etc) are now asking for Personal Guarantees from lawyers. Trust and a reliance on probity are definitely a thing of the past. Reply Link Mutton Jeff 22 March 2013 at 05:34 “It’s quite wrong that the partners in such firms can walk away from their creditors, when partners in unincorporated forms, who actually take responsibility for their financial decisions and accept liability for their debts, would be made bankrupt in a similar situation” It’s dumb that people think there should be any difference between law firms and other commercial concerns, which use limited liability structures as a matter of course. There is no good argument as to why law firms should operate on an unlimited liability basis. Who honestly gets angry about this stuff? Law firms are businesses. Sometimes businesses fail. Reply Link Mutton Jeff 22 March 2013 at 05:40 “This is a lamentable lapse of the probity we used to take for granted.” Can those seeking to inpugn the probity of those involved in the relevant firm please confirm that they have reliable sources and grounds for their accusations? Or if not, perhaps consider retaining the services of Messrs. Carter-Ruck? Unbelievable the idly judgemental inanities that people fire off on the internet. Reply Link Name Email Cancel reply Threaded commenting powered by interconnect/it code.