New firm to Assist Run-Off of PI Law Firms
A new company has been launched to help sell or run-off law firms working in the personal injury (PI) arena which, following changes as of 1 April, are in distress or facing insolvency. Recovery First has been set up to assist restructuring and insolvency businesses involved with distressed PI firms.
The company says it will ensure SRA compliance and help to sell a PI firm’s cases to multiple purchasers, thereby achieving a higher value for the work in progress by removing some of the risks associated with purchasing books of business from distressed firms. In some cases, as part of the service, Recovery First will also facilitate the availability of immediate cash to cover administration set up costs.
‘Many personal injury law firms are in distress due to the fact they must now settle in excess of ten matters to achieve the same turnover resulting from three matters pre 1 April, they are therefore in the situation of being forced to sell or run-off,’ says Recovery First managing director, David Johnstone.
‘Despite the increasing efforts to get such firms to recognise the seriousness of the situation, many are still leaving it too late to engage outside assistance,’ he adds. ‘It means they could either require protection when going through a restructuring period or, worse still, a formal insolvency process. What we will do is dramatically reduce the discounts applied by acquisitive firms and help achieve up to 100 per cent of the WIP value for the vendor.’