What are the main strengths of Recovery First?

When a law firm needs to transfer a book of work, whether because of restructuring, succession, financial pressures, a merger or a decision to exit a particular area of law, there are two priorities that can easily come into conflict.

The firm wants to preserve as much of the value within its work in progress (WIP) as possible. At the same time, clients need to be transferred to firms that are capable of taking over their matters and providing the specialist support they require.

Recovery First has developed its model around achieving both.

In the video, our Director, David Johnstone, explains why this is one of the key strengths of the Recovery First approach:

“It is the fact that we de-risk it from the panel’s perspective in terms of preserving the value that’s in work in progress. And from the client’s perspective, it is very much about the fact that they get a firm that has capacity to deal with their matter immediately and has a specialisation in their matter.”

He describes those two factors as potential “game changers” when transitioning one firm’s book of business to a number of other firms.

Preserving the value of WIP

A law firm’s WIP can represent a substantial asset, particularly within areas such as personal injury, clinical negligence and other types of contingent or deferred-fee litigation.

However, the headline value of a caseload and the amount ultimately realised from it can be very different.

Simply transferring an entire book of work to a single acquiring firm can create additional risk. The receiving firm needs the right expertise, resources and capacity to progress every matter effectively. If it does not, cases may take longer to conclude and the value ultimately recovered can be affected.

Recovery First takes a different approach.

Rather than relying on a single acquiring firm, cases can be allocated across Recovery First’s panel of approved law firms. This allows matters to be matched with firms that have the appropriate expertise and capacity to progress them.

The objective is not simply to find somewhere for the files to go. It is to create a structured transfer process designed to preserve and maximise the value contained within the WIP.

Matching cases with firms that have capacity

Capacity is an important but sometimes overlooked consideration when transferring a large caseload.

A receiving firm may specialise in the relevant area of law but still not have the resources to absorb hundreds or thousands of additional matters at once.

Recovery First’s panel model helps reduce that concentration risk.

Instead of expecting one firm to take responsibility for the entire caseload, matters can be distributed between suitable firms according to factors including their specialism and available capacity.

This can be particularly valuable where a firm is transferring a substantial or varied book of business.

The right expertise for the client

There is also the client’s position to consider. A file transfer is not simply a commercial transaction between law firms. Behind every file is a client whose legal matter still needs to be progressed.

As David highlights, one of the strengths of the Recovery First model is that clients can be transferred to a firm with both the capacity to take their case on and relevant expertise in their particular matter. This is fundamental to a successful transfer.

Matching cases appropriately helps create continuity for clients while allowing the receiving firms to take on work that fits their existing capabilities.

Reducing the risk of relying on one receiving firm

Using a panel of receiving firms also means the success of the overall transfer is not dependent on the performance or capacity of a single practice.

Recovery First manages the process across multiple firms, providing a structured route for transferring matters and monitoring their progress.

Its bespoke software provides real-time visibility of transferred cases, allowing the performance and progression of the WIP to be tracked over time.

For the transferring firm and its professional advisers, this creates greater transparency over what can otherwise be a lengthy process of realising value from a caseload.

More than a solution for distressed firms

Although transferring WIP can become necessary when a law firm experiences financial difficulty, the Recovery First model is equally relevant to firms making strategic changes.

A firm might decide to exit personal injury or another practice area that no longer fits its plans. Partners may be considering retirement and succession. A merger or acquisition may be progressing where the buyer does not want to inherit every department within the existing practice.

In these circumstances, separating and transferring part of the firm’s caseload can help facilitate the wider transaction.

Recovery First can therefore work alongside law firms and their existing accountants, restructuring professionals, insolvency practitioners and M&A advisers to deal specifically with the transfer and realisation of WIP.

A structured approach to transferring legal work

The strength of the Recovery First model comes from recognising that a successful WIP transfer has to work for more than one party.

For the transferring firm and its advisers, there is a need to preserve value and reduce the risks associated with the run-off of the caseload.

For receiving firms, work needs to be allocated in a way that reflects their capacity and expertise.

Most importantly, clients need continuity and a new legal team capable of progressing their matter.

Using a panel of specialist firms rather than relying on a single buyer allows Recovery First to provide a structured way of bringing those requirements together.

If your firm is considering selling or transferring a caseload, exiting a department, restructuring or preparing for a wider sale or merger, contact Recovery First to discuss the options available for your WIP.