MORE than 400 jobs have been saved after law firm DWF bought its troubled rival Cobbetts out of administration in a pre-pack deal.
Last week, Cobbetts filed notice that it intended to appoint KPMG as administrators, following worse than expected trading in November and December last year.
Cobbetts obtained an interim statutory moratorium to enable a sale of the business and its assets.
The Cobbetts team is made up of 491 people based in Manchester, Leeds and Birmingham, including 72 partners. The Cobbetts’ staff will move to DWF’s offices in the next few weeks. As part of the deal, DWF will honour all training contracts, including contracts with trainees who have yet to start.
Mark Firmin, joint administrator at KPMG, said: “In the current economic climate we are delighted to have brokered a deal that saves more than 400 jobs,
“We have moved swiftly, working in collaboration with a number of stakeholders including the Solicitors Regulation Authority. This is a strong result and an important step forward for DWF in the market.”
In Leeds, Cobbetts has around 190 staff based in No 1 Whitehall Riverside. These staff will join the 230-strong team at DWF’s office in Bridgewater Place, Leeds. DWF has a licence to operate out of Cobbetts’ Leeds building until the transfer is completed. The building will then be passed back to the landlord – TCS Whitehall Riverside – and re-let.
The move excludes Cobbetts’ 27-strong banking litigation team because of potential commercial conflicts, following DWF’s recent merger with Fishburns. This team will join Leeds-based Walker Morris.
The acquisition will also not include the Cobbetts’ debt recovery team, Incasso.
A statement issued yesterday on behalf of DWF said: “However, DWF is supporting those involved, including assisting in the day-to-day management of client affairs for the immediate future, while the long-term direction of the business can be determined.”
Andrew Leaitherland, the managing partner and chief executive of DWF, said: “Both firms agreed that this was the best route forward and so the process was a smooth one, with the two parties working towards the same outcome. This is the latest milestone in what is already proving to be a positive year for DWF and one that continues along our clearly defined plan of strategic growth.”
Exactly a year ago, DWF and Manchester-based Cobbetts revealed they had ended merger talks because of the uncertain market conditions.
DWF has grown rapidly through mergers and lateral hires in recent years. DWF had a turnover of £102m last year.
DWF has 1,800 people based in Birmingham, Coventry, Edinburgh, Glasgow, Leeds, Liverpool, London, Manchester, Newcastle. Preston and Teesside.
Walker Morris yesterday welcomed the arrival of Cobbetts’ Leeds-based banking litigation Team. The combined Walker Morris-Cobbetts team is one of the largest of its kind in the UK.
The acquisition includes partners Andrew Bennett and Ciaran Corry. Following the acquisition, the Walker Morris banking litigation team has five partners and 47 fee earners. The acquisition brings Walker Morris’s total staff number to more than 480, including 48 partners.
Ian Gilbert, the managing partner at Walker Morris, said: “The opportunity to bring two leading banking litigation teams together was too good an opportunity to miss. The acquired team has an excellent reputation and the client base fits extremely well with our own highly rated team.”
Mr Gilbert acknowledged law firms were operating in a challenging environment, where it was important to have a clear strategy.