Professional firms must pay ‘far greater attention to cash management’ following the break-up of north-west firm Halliwells, the firm’s administrator warned last week.

A deal to sell Halliwells’ Manchester, Liverpool and Sheffield operations to three former rivals was completed last week, and Halliwells has now been placed into administration.

Joint administrator Dermot Power, BDO business restructuring partner, said: ‘Other professional firms will have to pay far greater attention to management and particularly cash management, following the stress testing of an LLP framework which has been less than robust.’

City firm Barlow Lyde & Gilbert (BLG) scooped up Halliwells’ Manchester insurance practice, taking on 17 partners, plus other lawyers and support staff. National firm HBJ Gateley Wareing took on the remaining 40 partners, along with a number of business units. Both firms are reported to have sought to limit their liabilities as successor practices by ring-fencing incoming Halliwells staff into sub-LLPs that will be closed down once the expanded business has stabilised.

North-west firm Hill Dickinson, which took over Halliwells’ Liverpool and Sheffield operations, has employed around 125 Halliwells staff.

A partner and 37 central services staff from Halliwells’ north-west operation have been made redundant, as have four staff in its London office, including two trainees. Some 45 trainees due to start at Halliwells during the coming year have had their offers cancelled.

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 cashflow and the partnership resources.’

City firm Kennedys, which agreed last December to take on a 70-person insurance team from Halliwells’ Sheffield operation this August, said the staff were transferred to its new Sheffield office on 19 July.