'Failed merger talks': why Wright Hassall went under

Merger talks with dozens of different parties came to nothing before a nationally known firm was forced to enter insolvency proceedings, it has emerged.

A notice of administrator’s proposals for the Midlands firm Wright Hassall revealed this week that equity partners had tried for more than a year to find a buyer. In September 2024 they decided to look at strategic options, including a sale to another law firm, a merger or a sale to private equity. But despite engaging directly with 28 parties,  discussions with numerous professional advisers and brokers, and several bidders undertaking due diligence, the LLP was ultimately unable to secure a buyer or merger partner.

At the same time the departure of several partners exacerbated the situation, adversely affecting both revenue and profitability. The business itself had gone backwards in the previous two years, with turnover dropping 3% in 2024/25 to £17.1m and profit dropping marginally to £1.83m.

With key partners having departed and no investor coming forward, the remaining equity partners were unable to support the LLP based on the projected small profit levels and formally withdrew their support for the business.

Wright Hassall had traded in some form for 179 years and was a traditional practice offering a full range of services.

In October, the LLP was introduced to administrator Leonard Curtis who arranged for national firm HCR Legal to acquire the assets and staff through a pre-pack arrangement. HCR paid £240,000 on completion of the sale and has negotiated a commission between 10% and 65% on the work in progress and book debts, depending on the length of those debts. 

In total, 113 of the 129 Wright Hassall members of staff were transferred to HCR, with the remainder leaving of their own accord and being paid their notice period.

The administrators’ notice states that the firm owed £2.6m to Lloyds in fixed and floating charges. These are expected to be settled in part, depending on the realisations from ongoing work. Around £675,000 owed to HM Revenue & Customs is expected to be repaid in full. There is no estimate of what unsecured creditors are owed.

Pre-administration costs come to around £173,000, which includes £77,400 due to law firm Charles Russell Speechlys for advising on the purchase agreement and other appointment formalities.