North London law firm Alexander & Partners has bought parts of the Law Direct group of 13 law firms in a pre-pack following its administration.
The joint administrators, Begbies Traynor partners Stephen Katz and Paul Cooper, cited problems with integrating the various acquired firms as the primary reason for the group going down.
Their announcement yesterday of the sale of “certain aspects of the business and assets” revealed that the Solicitors Regulation Authority’s (SRA) interventions into 12 of the firms related to those parts of the businesses not covered by the deal.
Law Direct was an umbrella company for smaller practices that it had acquired since incorporating in 2011.
It traded as: Blackstone Law Solicitors & Advocates, Ellison & Co, Strain Keville, Geoffrey Bryant & Co, Brinley Morris Rees & Jones, Redfern & Co, Beverly Davies Penny, Volks Hedleys, Kirk & Partners, Davies Ingram Harvey, Davies Phillips & Partners, Griffith Smith Conway, and Dakers.
In a statement, the administrators said: “Over the last 24 months, the company began to experience financial difficulties following a period where it made numerous different acquisitions.
“For a number of reasons, the integration of the acquired businesses was not straightforward and became increasingly difficult over the period, resulting in the company being unable to properly control the businesses and to renew professional indemnity insurances across the various practices when they were up for renewal.
“Due to these complications, it became clear that an insolvency process was required and after discussion with the SRA, it was determined that a pre-packaged administration sale, where requisite marketing, bidding, negotiation and contract preparation was undertaken prior to the company entering administration, would ensure that part of the business could seamlessly transfer to a new operator, ensuring that as many of the clients as possible could be protected and their respective files progressed without significant disruption.”
The sale to Alexander & Partners only secured roles for three staff, however – we have asked how many have lost their jobs and which parts of the group were not included in the sale.
Alexander & Partners covers personal injury, clinical negligence and family law, including divorce and child care work. It too operates under other brands: Banbury firms Hancocks and Cotswold Family Law.
Mr Katz added: “Despite the significant complications faced by Law Direct Limited after an extensive period of acquisitive growth, we are pleased to have secured a positive outcome and the safe progression of much of the ongoing client work that was currently being progressed by the firm.”
We have approached Alexander & Partners for comment.