The Original Focus Behind Recovery First

When Recovery First was first established, the main aim was to support insolvency practitioners dealing with distressed law firms in a more effective and commercially viable way.

At the time, there was a noticeable gap in the market, particularly in how legal practices facing financial difficulty were handled, and the limited options available to insolvency professionals.

Supporting Insolvency Practitioners in Complex Situations

The original focus of Recovery First was very much centred on helping insolvency practitioners (IPs) navigate the challenges of dealing with struggling or failing law firms.

One of the key issues IPs faced was a fundamental restriction that they cannot trade a law firm themselves, so their only option was to pre-pack the sale into one firm at a highly discounted price.

The Limitations of Traditional Pre-Pack Sales

As mentioned, the default solution in these situations was a pre-pack sale, where the firm’s ongoing work, i.e. its work in progress (WIP), would be transferred into another law firm.

However, this approach came with significant challenges.

Typically, all of the work would be transferred into a single acquiring firm, which then had to take on:

• The operational burden
• The financial uncertainty
• The regulatory and case-related risks

Because of this concentration of risk, the acquiring firm would often apply a heavy discount to the value of the work it was taking on.

The result of this was that the overall value recovered from the distressed firm’s work in progress was often significantly reduced.

A New Way of Thinking

Recovery First’s original concept was to rethink this model entirely.

Rather than placing all of the responsibility and risk onto one firm, the idea was to spread that risk across multiple firms.

By doing so:

• No single firm was overexposed
• The perceived risk of taking on the work was reduced
• Firms were more willing to engage on fairer commercial terms

This simple but effective shift in approach made a meaningful difference.

Improving Outcomes from the Outset

By focusing on de-risking the process for incoming law firms, Recovery First was able to help insolvency practitioners achieve better outcomes from the very beginning.

With less risk priced into the transaction, the work in progress could be transferred at a higher overall value, benefiting creditors and stakeholders alike.

Solving a Clear Problem

At its core, Recovery First was built to solve a practical problem within the legal and insolvency sectors:

• Supporting IPs who were limited in what they could do
• Reducing risk for law firms taking on transferred work
• Maximising the value of distressed legal practices

 That original focus continues to be seen in the approach today; creating smarter, more balanced solutions in complex situations.