Rise in number of distressed law firms

Feb. 29, 2012 - PRLog -- New figures show that the number of law firms in distress has risen dramatically.

This could be made worse by the introduction of alternative business structures
(ABSs) under the new Legal Services Act, according to research by Begbies Traynor.

The firm has issued its quarterly ‘red flag alert’ which shows that 163 professional
services businesses were facing ‘critical’ distress in the last quarter of 2011.
This is an increase of 61% compared to the same period in 2010 and Begbies Traynor
says the majority of these were legal firms.

According to the alert, the last quarter of 2011 saw some non-legal businesses
finalise plans to offer legal services ahead of 3 January 2012, when applications
for such practices could officially be received.

However, while the Legal Services Act presents opportunities for non-legal firms,
many law practices have found themselves ‘floundering’ as clients cut back on their
legal fees spending, the alert adds.

Michael Bernstein, a partner at Harris Lipman, said many smaller legal firms were
left wondering what to do next due to the uncertainty raised by the Legal Services
Act.

He warned that this was not a viable strategy and urged firms to make a positive
decision about their future, rather than simply waiting to see what happens.

Article sourced from: Harris Lipman

http://www.griffinandking.co.uk/

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Griffin and King are a leading firm of Insolvency Practitioners within the West Midlands with offices covering Dorset, Hampshire, Shropshire and Mid Wales