Closing a Law Firm
The closing of a law firm is not straightforward largely due to the regulatory requirements.
There are a host of considerations and actions that must be taken and failure to close a firm properly will result in an SRA investigation, with the potential to damage the reputation of the owners of the firm, including risking sanctions.
Closure is a very significant decision to make and there may be many reasons why a law firm needs to close or is considering closure, but it may not be the only option. If your firm is considering closure, taking expert advice will assist in ensuring this is the right decision or may direct a different path but importantly whatever path is taken, we will ensure the necessary and correct actions are taken to protect everyone involved.
Debating the issues and the rationale for closure is an important step before the final decision is made. Our access to the market and insight will assist law firms and their owners in making an informed and correct decision.
We have provided a Pre-Decision and Post-Decision Law Firm Closure Checklist, which can be downloaded by clicking on the link HERE.
Law Firm Compliance
Due to the regulatory requirements surrounding law firms, the closure of a law firm is not a simple process and needs to be conducted with care and attention to avoid regulatory repercussions for both the firm and the owners.
Whether you are seeking to close your firm completely or your firm is merging or being sold, there will be responsibilities that the owners of the firm must address.
Before making the final decision law firms and their owners are advised to take guidance from an independent body, such as The Strategic Partner, as there may be alternative options which are not immediately obvious.
Is your firm compliant?
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Law Firm Closure Services
At The Strategic Partner, we spend time with law firms and their owners to guide them on the best course of action when they are considering an exit, we identify their options and guide them on the appropriate actions to take or we work with the firm to implement the action plan.
Understanding and Planning is essential to avoid negative attention from the Solicitors Regulation Authority. There are a number of actions and considerations for a firm and we will help the firm to understand each of these to ensure an informed decision on closure is made.
If closure of the firm is the correct and desired approach, The Strategic Partner works with firms to ensure that closure is undertaken on an orderly basis and where that is simply not possible, due to sudden issues (such as financial, death or impairment) we will work with the firm to minimise negative impact wherever possible.
Our closure services will include helping to build a closure strategy through to taking the necessary action on your behalf.
The key areas to consider are: –
- Is closure the correct and most appropriate option?
- SRA Notifications and other regulatory issues
- Notifications (website, letterhead, website, phones .etc)
- Companies House Notification where necessary
- Insurance and Runoff cover including extended policy periods
- Staff Management
- Client Management
- File Transfers
- Liaison and engagement with Accountants
- Banking and Finance
- Client Accounts and Office Account Management and considerations including aged client balances
- Suppliers and contracts
- Disbursement Management
- Files Storage and Archive Management
- Undertakings – transfers and discharge
- HMRC considerations
- Debt Management
- Credit Management and Credit Control
- Offices and Office Equipment
- Case Management System considerations
- Partnership and Shareholder agreements including disputes
There is a significant amount of work to undertake and organise when a law firm is to be closed on an orderly basis and planning for the closure is an essential step to ensure each task is completed correctly protecting the firm, the owners, the compliance officers, the staff and the clients.