One zombie firm down, many to go. It was not entirely a shock, but at least the bad news last week that Cobbetts was filing for administration was superseded by the revelation that DWF was making a swift distress purchase.
At the time of writing it is not clear how much of legacy Cobbetts will be incorporated into or ring-fenced from the DWF business, or indeed how many jobs will be saved, but you’ve got to applaud Andrew Leaitherland’s eye for a bargain.
Cobbetts fitted the classic undead mould; overextended in geography and over-reliant on property. The fact the firm admitted defeat a day before the deadline to pay out partners’ taxes is highly significant, and once again raises questions over partnership capital structures.
Only a small number of firms in The Lawyer’s UK 200 have embraced innovative capital arrangements. But ABS is changing that, and there have been some early trailblazers. Take Jeff Winn of Newcastle-based Winns, who we profile this week (see page 22). Many say that his business sector of RTA (road traffic accident) is facing doom, but he has scoped out what the buyer needs – medical and legal advice plus car hire – with the emphasis on service delivery. The business now turns over £32.8m and the structure, unlike the traditional legal model, has inherent scaleability.
The partnership model is not bust, but its worthy collectivism hasn’t always fostered individual entrepreneurship. Stanley Berwin set up not one but two firms in the 1980s, but since then there’s not been much reinvention. Were you to design a law firm from scratch, you wouldn’t start from here. If commercial legal business has a future outside BigLaw, it must nourish entrepreneurs.
- This week we’re embarking on a soft launch of our redesigned website www.thelawyer.com. It’s designed to showcase the depth of our content and will house a spankingly fine law firm directory called Acumen. Given the unparalleled reach of our website and the engagement of our online readers – as shown dramatically last week with the number of comments on Cobbetts reaching Linklaters levels – this is the beginning of a new digitally-focused era for The Lawyer. And as you’ll find out over the next few months, there’s a lot more to come.