Five partners from London firm Child & Child, who acquired the firm after it went into administration at the end of last month in a management buyout, used an off-the-shelf alternative business structure (ABS), it has emerged.
The partners bought the ABS from rapidly expanding listed law firm Ince Gordon Dadds, which has owned it since taking over Cardiff law firm Thomas Simon in February last year.
Child & Child announced earlier this month the five partners had bought the firm after it went into administration at the end of June: Mo Hakim and Zach Reynolds, who will share the managing partner role, along with Mark Brassey, Ursula Danagher and Estelle Tague.
The firm said a ‘private investor’ had taken an equity stake in the 70-person business.
Mr Hakim and former partner Khalid Mohammed Sharif are the directors of Child & Child Ltd.
Its most recent accounts, for the year to 31 March 2018, showed a 19% increase in turnover to £12.4m, with profits up 13% to £923,000.
The firm’s website said Begbies Traynor was appointed administrator of Child & Child Ltd on 28 June 2019 and Pinsent Masons appointed solicitor manager with the task of transferring client files to Allium Law Limited, which trades as Child & Child.
The five partners taking part in the MBO are directors of Allium Law, along with Christopher Yates, group finance director of Ince Gordon Dadds. Thomas Simon Limited changed its name to Allium Law on 3 July 2019.
A spokesman for Ince Gordon Dadds told Legal Futures that the five partners needed a new corporate entity as part of the MBO process and bought one from Gordon Dadds for “an undisclosed sum”.
He said Mr Yates remained on the board of Allium Law while they waited for the investor to be approved by the Solicitors Regulation Authority.
The spokesman said the moment this happened, Mr Yates would leave the board.
He added that Ince Gordon Dadds had not given the Child & Child partners any support in their MBO, other than selling them their corporate entity.
Child & Child said it was not taking media enquiries.
In a statement on its website, partner Estelle Tague said: “This is an exciting time for our clients. All of the senior management team are highly experienced lawyers who have been with Child & Child for many years looking after its clients’ interests.
“Each member of the new management team brings their own unique experience and perspective to the management table, which will be invaluable in helping us achieve our shared vision long into the future.”
Mr Sharif was fined £45,000 by the Solicitors Disciplinary Tribunal earlier this year for a series of breaches of the anti-money laundering rules in a case linked to the infamous Panama Papers.
Mr Sharif acted for clients not identified in the ruling – but reported to be the daughters of the president of Azerbaijan.
Mr Sharif no longer appears in the ‘People’ section of the firm’s website or as working at the new firm on the Law Society’s ‘Find a Solicitor’ service.