Law Firm Insolvency - think about your employees

Published: 20/05/2024 By Vickie Lennard

Directors of Law Firms are under enormous pressure when their business is failing, and they are considering Liquidation. They have all the responsibility of dealing with the Solicitors Regulation Authority (SRA), the Law Society and, in many cases, the Legal Services Ombudsman (LSO) and this is all before they can consider their Professional Indemnity Insurance firm and usually a broker as well.

But in all of this, very often, the employees are not fully considered. Not from the point of view that a director will know and sympathise with the fact that the staff are all about to lose their jobs, but more so from the perspective of information and timing.

All Law firms that face insolvency will have live matters that need to be passed to other solicitors for attention as well as a client bank account which will need careful attention to either pass sums held on account to another firm or to be returned to the client. These things cannot be undertaken in a confused and panic-stricken rush as that is how mistakes are made.

At the point of closure of a firm agents of the insolvency practitioner will be coming to the office to deal with the files, documents and computer equipment and if staff do not fully understand that this will happen or how it will happen then it can be quite traumatic for them.

The more time and information that can be given to staff, the more efficiently and calmly the employees will be to help close the firm.