Wright Hassall: Partners withdrew support for business
Midlands law firm Wright Hassall held talks with 28 possible acquirers or merger partners over the course of a year before being sold in a pre-pack administration to one of them.
Last month saw the surprise news of the historic firm’s sale to HCR Law, with all but seven of its 127 lawyers moving over. The fate of non-lawyer staff is not known.
According to the newly published report and statement of proposals from the joint administrators at Leonard Curtis, the equity partners of the 179-year-old Leamington Spa-based practice decided in September 2024 to explore opportunities following “a number of approaches from external parties”.
They went on: “This initiative aimed to evaluate a range of potential strategic options, including a sale to another law firm, a merger or a sale to private equity.
“Since September 2024, the firm has engaged directly with 28 parties identified as potential acquirers or strategic partners and has conducted discussions with numerous professional advisers and brokers.
“Despite several parties undertaking due diligence, the LLP was ultimately unable to secure a buyer or merger partner.”
The report said the departure of several partners had “further exacerbated the situation”, adversely impacting both revenue and profitability.
With the remaining 13 equity partners withdrawing their support for the business in light of the “projected small profit levels going forward”, the firm became insolvent.
HCR had been in discussions about buying Wright Hassall on a solvent basis and moved in when it became insolvent.
In the year to 31 March 2025, Wright Hassall recorded a profit before partners’ remuneration of £1.9m on a turnover of £17m, similar to the previous year.
HCR paid £240,000 plus a percentage of work in progress (WIP) depending on its age, ranging from 50% of WIP that is less than three months old to 20% of any older than a year.
As at 27 October, the firm had 5,208 active cases with a total WIP of nearly £3.6m, around 72% of which was non-contingent.
Wright Hassall also had a debtor ledger valued at £5.2m and HCR will receive a staged commission for realising the debts, from 10% of any debts less than three months old to 65% of those more than two years old.
At the time of the administration, the firm owed Lloyd’s Bank £2.6m, made up of a £1.9m overdraft facility, £450,000 owed for a Coronavirus Business Interruption Loan and £300,000 in respect of credit cards.
The administrators said they expected this debt to be settled, while HM Revenue & Customs should be paid the £675,000 it was owed too.
