By Legal Futures Associate Recovery First
A solicitor who “abandoned” his law firm, leaving the office in disarray with piles of letters discarded and client files containing confidential and privileged information, described as a fire hazard by a neighbouring tenant and clients “reduced to tears,” has been struck off.
His conduct, the SDT said, showed “a lack of care for anyone affected by the closure, principally his clients, who were seemingly ‘left high and dry.”
This case is an extreme example but highlights the importance of a structured closure of a law firm.
An unorganised withdrawal can have severe consequences for all parties involved, not least of all the clients, often resulting in significant stress and financial difficulties.
Failure to meet regulatory requirements expose solicitors to disciplinary action, including suspension or being struck off, claims of negligence, breaches of confidentiality, loss of documents, and complaints to the Legal Ombudsman for inadequate service.
This is where Recovery First sets itself apart. Recovery First assists in structured withdrawals from law firms, whilst ensuring 100% of the recoverable WIP value is retained by the law firm.
Whilst an orderly closure of a law firm can be more time-consuming, it offers significant long-term benefits. It reduces stress, avoids negative publicity, prevents unwanted scrutiny from the SRA, and makes sound financial sense, but most importantly protects the firm’s clients.
Advance Planning is essential –—whether closing the firm entirely or looking for a buyer, engage expert advisors early to guide you through key aspects such as marketing, due diligence, financial and legal advice, and obtaining regulatory consent. These processes require time and careful coordination but are straightforward when handled correctly.
Preparing for Sale – this is crucial to protect the value of your firm. Potential buyers may reduce their offers if they identify unaddressed issues, urgency, or distress in the closing process.
Engagement with the SRA – liaising with the SRA about your plans to close is a vital step. A structured withdrawal ensures compliance with regulatory requirements, particularly concerning client confidentiality and proper handling of client funds.
Successor Practice Challenges – can reduce the value you are offered by a buyer, and often requires you to purchase costly indemnity insurance run-off cover.
Data Protection and Confidentiality – can be a minefield, but handled correctly can be straightforward. Firms have faced disciplinary action for breaches, so careful management is critical.
Client communication – clear and timely communication helps maintain trust and ensures compliance with the regulations.
By approaching the closure process methodically, law firms can minimise risks, safeguard their reputation, and achieve a smoother transition for all involved.
There is specialist help available. Recovery First assist with structured closure of law firms
The Recovery First model has helped many choosing to close their law firm by managing the orderly run-off of files, ensuring all compliance issues are avoided and client files are well looked after. It can also help to avoid any successor practice issues and insurance run-off cover issues that may arise.
Recovery First provide a complementary service for professional advisors that assist in the closure of law firms, such as advisory only accountants and solicitors specialising in regulatory matters advising their peers.
The Recovery First process involves discreetly selling a firm’s cases to multiple purchasers on their panel of solicitors. This mitigates the risks to the buying firms and results in a higher value for the work in progress (WIP) being recovered, whilst ensuring SRA compliance.
Their team manage the transfer of files from start to finish, placing case files with the best firms suited to deal with their unique client matter.
For more information about Recovery First, and the services that it provides clients, visit https://www.recoveryfirst.co.uk/.
