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UK law firms facing financial difficulties?

Posted by: Laurence Simons 20/06/13

We've all had those months when things get a little tight and we need to save a bit of cash. Whether you do it by re-using every teabag three times, giving up truffles for a few weeks, wearing giant conch shells instead of buying new shoes or using the residue in the back of the oven for beef stock - this is a place of no judgement.

However, for a number of UK law firms it looks like more could be needed than just a few days of abstaining from expensive coffee.

According to the Solicitors Regulation Authority (SRA), as many as 160 UK legal organisations are in major financial difficulty, with eight at immediate risk of collapse.

These concerns have been afoot for some time but at a recent meeting the body confirmed that the firms in question are currently under "intensive supervision" because of the precarious position they have found themselves in, reports the Lawyer magazine.

"Some firms have started to struggle for a range of different reasons, including changes to the legal services market and the continuing difficult economic conditions," a spokesman warned.

He added that the SRA is attempting to find out why these problems have occurred and deepen its understanding of the situation. In other words, it's not angry, it's just disappointed, and would very much like you to explain where all the money has gone.

"All firms involved will be given further information about the process, the SRA's approach to ensuring the security of the information provided and contact points for any questions," the spokesman concluded.

The SRA can intervene in firms that are experiencing financial difficulties, with the stated aim of ensuring that clients are protected from any problems that arise.

With recent reports suggesting the predominance of the big firms is eating away at the market share of smaller competitors, this new report can only add to concerns about the future of the industry. Perhaps it's time to switch to that cheap instant coffee.