Jobs start to go as Halliwells appoints administrators

THE BREAK-UP of Halliwells has already led to 35 Manchester-based support staff being made redundant, it emerged today.

Court documents filed last night saw BDO formally appointed as administrators to Halliwells LLP and it is understood that the firm has already held a meeting with 35 support staff to inform them there is no post for them within any of the three law firms that are taking on ex-Halliwells staff and partners.

Four people from the firm’s London office , including two trainees, have also lost their jobs. 

The negotiations being conducted by former Halliwells partners were previously understood to have included a Transitional Service Agreement which would have kept all existing staff in place at least until the end of September. A further 78 members of staff are part of this agreement.

Thus far, Birmingham-based HBJ Gateley Wareing has announced its takeover of the bulk of Halliwells’ Manchester operations, including its Spinningfields office.

The firm said that some 40 former Halliwells partners in corporate, real estate and insolvency are joining its practice. In total its is taking on 200 Halliwells staff, including the 40 partners. It is understood that these will all be employed by a newly-created vehicle, HBJ Gateley Wareing (Manchester) LLP.

Meanwhile, Hill Dickinson has announced that it is providing a home for 125 former Halliwells partners and staff, comprising the practice’s Liverpool office and the remainder of the Sheffield practice which hadn’t been taken on by Kennedys when it announced that it was taking on 70 former Halliwells staff and partners in December.

Barlow Lyde & Gilbert (BLG) has this morning announced that 17 former partners from Halliwells’ insurance practice were joining the firm. When fee earners and support staff are added in, the total number of staff being incorporated into BLG’s Manchester office, which opened last year, is 238.

BLG said that the deal would take its own revenues past the £100m mark, making it one of the top 25 law firms in the country by revenue.

The former chair of Halliwells’ insurance division, Kevin Finnigan, said: “We had offers from a number of parties who were interested in us joining their firms, but BLG’s was the most compelling strategically.

“The recognised strength of their brand in the insurance market makes them a natural fit for us.”

This would bring the total number of partners and staff joining the three firms to 563, which is considerably below the 825 listed as the average number employed by the firm in its last filed accounts for the year to April 30,2009. 

The workforce is thought to have shrunk to around 720 recently as a number of partners and their teams left to join other firms.

In a further twist, a source has indicated that many of the firm’s fixed fixed share (salaried) partners are facing an unexpected personal tax liability as the former Halliwells practice did not have enough funds to settle an outstanding tax bill.

This has caused some anger among former salaried partners, although sums could eventually be repaid once administrators work out the scale of the firm’s losses and attempt to reclaim tax against these.

Still, a number of partners are believed to have defected from the firm in recent days.

These include Julian Diaz Rainey, who was the firm’s relationship partner with Manchester United, who has resigned from the firm to join Hill Dickinson and real estate partner Rachel Pitman is moving Pinsent Masons. 

BDO partner Dermot Power, who was appointed joint administrator of law firm Halliwells last night, confirmed that around 35 redundancies had been made among support staff.

A further 78 staff have entered into a transitional agreement with the three other firms  taking over the assets, which gives them a good chance of securing a full-time job, he said.

“The situation could have been much, much worse. The process has not been an easy one to say the least.”

Mr Power added: “Securing sales of the business to other highly regarded firms, which will protect approximately 700 partner and staff jobs, is positive news for the employees and the industry as a whole.

“It is well known that the firm assumed substantial property obligations in recent years which significantly increased operating costs.

“This, together with the slowdown in transactional activity in the current economic climate, put unsustainable pressure on cash flow and the partnership resources.

“Other professional firms will have to pay far greater attention to management and particularly cash management, following the stress testing of an LLP frame work which has been less than robust,” he added.