The Law Society last week set up a dedicated website to help solicitors and trainees worried about the viability of their firms, after radical changes to the legal services market claimed another high-profile casualty.
On Monday, Gazette Online exclusively revealed that all 200-plus solicitors and employees of Midlands firm Blakemores, owner of the consumer brand Lawyers2you, had been told to clear their desks and go home following an intervention by the Solicitors Regulation Authority.
An insider told the Gazette that employees were summoned to a meeting mid-morning, at which they were told to collect their possessions and leave. Those who asked about redundancy payments were informed they would need to claim 'from government'.
Chancery Lane acknowledged the gravity of the situation by taking 'emergency steps' in conjunction with Birmingham Law Society.
These include the launch of 'Surviving the Storm' (tinyurl.com/cz4n4vb), bringing together all the services the Society is making available to help Blakemores staff and the profession in what chief executive Desmond Hudson described as 'these difficult and challenging times'.
Work was also under way to ensure the swift transfer of Blakemores files to other local firms.
The demise of Blakemores and Yorkshire firm Atteys, and the stunning collapse of Cobbetts, have triggered widespread fears of a 'domino effect' that could see more firms go to the wall in the face of economic decline and deep funding cuts.
But Hudson counselled caution: 'It's important that we don't get swept up in the short-term effect of a cluster of cases,' he told the Gazette. 'Cobbetts and Halliwells, for example, were case-specific. Both involved substantial property investments at the height of the market.'
But he added: 'However, it is also the case that we cannot ignore the impact of ongoing recession, changes to legal aid and especially changes to personal injury. They do create a very threatening set of circumstances for many firms. If your business model and operating cost base are not as efficient as others, you will feel the chill winds of change.
'These changes have been a long time coming. The Society has been warning for some time of the need to plan for them and understand the market.'
Hudson also turned the spotlight on the critical role of the compliance officer for finance and administration (COFA), as firms seek to ride out the storm.
COFAs need to be asking searching questions, he suggested: 'What is the policy on distributing profits to partners? Is the right level of capital being retained in the business for these difficult times? What is the plan for managing debt and how quickly is the firm turning work in progress into cash?'