Selling work in progress files (WIP)
There are many reasons why a firm of solicitors would wish to sell their Work in Progress Files. The legal industry has undergone some major adjustments over the years which have led to some serious challenges around viable economic models for some sectors of the legal market. The personal injury sector has been particularly impacted by changes within the industry.
For some, these market changes, a severe hardening of the insurance market leading to significant increased in professional indemnity insurance premiums, the withdrawal of Government COVID related financial support and repayments of deferred VAT and loans becoming due are too onerous. These firms face urgent restructuring or potential insolvency action.
Selling Work in Progress files to exit a specific market can be a positive solution for law firms. It can help them focus on more profitable areas of law. It is definitely not only distressed law firms who make the decision to sell off WIP files, some of the main reasons for exiting a market and running off files include:
Insolvency/ Financial Struggles
The Process of Selling Work in Progress Files
Donor firm and/or administrator engage with Recovery First
Recovery First define a bespoke solution
- Recovery First establish a cohort of files to transfer
Recovery First appoint panel firms
- All parties agree to a project plan and timetable
Recovery First prepare legal agreements
- Recovery First plan and prepare for data extraction of electronic files
Recovery First manage completion of contracts
- Export matter and related accounts files
- Import data extraction to panel firms
- Manage handover of physical files
- Set up monitoring and report on case reviews
- Set up accounts and reporting regimes
Post-completion and beyond
- Contact clients to reassure and explain “what happens next”
- Review client matters
- Matter without merit – close file compliantly – submit ATE claim
- Progress cases to a conclusion
- Monitor review process with panel
- Monitor ongoing ATE claims
- Deal with matters transferring outside panel at client request
- Monitor ongoing performance of panel
- Monitor progress of transferred cases to third party firms
- Deal with queries and any issues arising from transfer
- Obtain lien for costs incurred to date
- Resolve any identified issues
- Collection of costs received by third party firms
- Report to all parties monthly
- Manage % allocation of fixed costs and deduction from damages
- Allocation of independent costs lawyer on standard rate matters
- Deal with generic and specific cost challenges
- Preparation of budgets
- Preparation of bills, negotiation, costs hearing, settlement
- Agree allocation of costs between donor and panel
- Negotiate reductions on disbursements
- Collection of costs
- Monthly cumulative reporting on costs collections
- Liaison with administrator on client account reconciliation
- Allocation of costs between donor and panel
- Monthly payment of entitlements to donor, panel and disbursement providers
- Payment of RF fees by deduction to payments due
Why choose Recovery First?
Our clients receive 100% of their recoverable WIP, plus their allocated entitlement to deductions from damages, anecdotally returning significantly higher value than a traditional WIP sale.
The unique scheme offered by Recovery First is suitable for both law firms and professional advisors. Our team manage the transfer of files from start to finish; placing case files with an approved law firm so as to protect the integrity of the client’s case, while at the same time maximising the value of the work in progress.
We guarantee 100% confidentiality for all clients. Get in touch today using the contact information below, or click a button at the top of the page and we will contact you to discuss the process.
Grant Saw Solicitors LLP
“With our Claimant Personal Injury partner retiring in 2014 we decided the time was right to step back from Claimant Personal Injury work. We reviewed the market options, were disappointed at the discounts being applied by potential buyers of the WIP and were subsequently referred to the methodology introduced by Recovery First offering the full realisation of WIP overtime. We are now pleased that we went with Recovery First, despite the concept being relatively new at the time, as it has effectively delivered what it said on the tin. Over the project period we have seen a steady flow of receipts being accounted for to us as per service level agreements, allowing us to recover the full value we had built up in the files."
- Mike Clary, Partner
“Having taken a strategic decision mid-2014 to be completely out of the Claimant Personal Injury sector by the end of March 2015 we were Recovery Firsts’ first client to step back on a phased basis. PI-Solutions were happy to customise their offering specifically for us and I am happy to say it has worked a treat. We were able to focus our own resource on matters where we had a possibility of concluding within our own timetable and utilised Recovery First's panel firms to continue to work on other matters. Not only have their services allowed us to retain the value we had built in the files, the nature of the services ensured we were able to offer our clients the option of moving to firms with the skill sets required to best service our clients’ specific needs. For firms considering a departure from Claimant Personal Injury work we would have no hesitation recommending Recovery First."
- Malcolm Lawrence, Partner
“Having worked successfully with Recovery First for a number of years, we would have no hesitation in recommending their services when it comes to realising value from a book of claimant personal injury work. For one particular FRP Advisory project the realisations are approaching 100% of what was thought to exist at the outset, in a situation where we would have struggled to achieve 20% by way of a discounted sale. On that particular project a number of cases are still running and there is every possibility the full WIP value will be recovered."
- David Thornhill, Partner”
" We had an extremely positive experience working with Recovery First after making the strategic decision to move away from an area of law and retune our business model. The process was very straightforward, and we were really pleased with the overall outcome. We would highly recommend the Recovery First model as a practical solution to any law firm wishing to exit a specific sector.”
Jonathan Dwek, Director
"I have worked with Recovery First on a number of projects, very successfully, over the years. Their process ensures that the clients’ cases are placed with firms with the specific expertise required to handle them effectively.
On a recent project, this was particularly relevant for some very high value military claims being brought against the Ministry of Defence – this is a unique area of law requiring detailed knowledge and experience.
The result being that matters have been successfully settling with the added benefit that the value recovered was not subject to a discount, but the full allocation of recovered profit costs.”
Andrew Gregory, Director
“We have worked alongside Recovery First on a number of successful projects over a number of years and have been really pleased with the outcomes achieved. The monitoring of all matters by Recovery First and the associated accounting and reporting are of an exceptional standard, resulting in very smooth administration with maximum recoveries being created for the creditors. We plan on working with Recovery First for future projects and would have no hesitation in recommending their model to others”
- Andrew Poxon, Administrator
It’s never too late to speak to Recovery First. Contact us now in the strictest confidence
07774 205 870
07887 796 989
106 Kennedy Building
PO Box 632