Sadly, it looks 99% certain that yet another mid-level Scots law firm has succumbed to the pressures of the legal market, and will be entering administration, before being sold off in a pre-pack arrangement to a law firm, or firms.
I have the dubious honour of being the only person who’s worked for both the Scottish law firms that have gone into administration in the past two years, one of which collapsed and one of which was sold in a pre-pack deal. I think, therefore, that makes me fairly well qualified to make some predictions about what will happen next in this process, and who will suffer.*
In this case, the original firm, or parts of it, is being rescued by another firm. The first thing that will happen is that the partners will soon start making their moves over to other firms that they’ve been negotiating with in the background. If they’re lucky, they’ll be able to take some of the staff in their fee-earning teams along with them. What they’re almost guaranteed to be unable to do though, is to take any of the support staff of the collapsing firm with them, unless there are already pre-existing vacancies for their skills in the new firm. So most or all of those support staff in the original firm will be made unemployed.
If the firm collapses rather than merges, the solicitors will have access to the excellent support (both financially, via access to hardship funds, and professionally via access to training courses) of their professional body, the Law Society of Scotland.
The clients are also protected by the Master Policy, and various structures that are in place to protect them and their interests in case of an extreme event like insolvency.
But what help do the support staff have?
In law firms, the term “support staff” covers a wide range of staff: HR, General Office/admin, IT, reception, secretarial support, and, of course, library services. Some of these staff may have a professional body that they could be members of that will support them during life-changing events like sudden and unexpected redundancy. However, most of them don’t. That means there are a lot of staff who, if made redundant, have no support. No organisation with hardship funds. No access to retraining or skills development opportunities. They’re left to make the best of a bad situation, all on their own.
Additionally, if there has been any misconduct by the firm management, the Law Society actually won’t investigate the issue themselves, they await the complaints of members of the public, despite having the power to initiate an investigation. And what member of support staff, who wants to continue working in an industry where the fee earning staff have the power, would start such a complaint, and ruin any chance of being employed in a law firm again?
Some people, when I explain how unsupported these staff are in law firms, say “well, you should join a union!” This is only ever said by people outside the legal sector, that have no understanding of the fact that law firms do NOT like their staff to have this sort of representation, or the ability to defend themselves from possible management manipulation. No law firm I’ve knowledge of recognises the existence of unions for their staff, or would engage with one which tried to represent support staff. Joining a union is not the answer.
*I don’t blame most of the staff at my former firms for what happened – many fought hard to protect their staff, but they could only do so much when they had little power to change things.