A now defunct 'Ping your lawyer' app company is unlikely to be able to recover the amount it is owed by its clients, after the model SME firm it provided legal services through was shut down by the regulator, its administrators have said.
Lawbit Ltd, the company behind LawBite, an online service which promised to ‘democratise’ legal advice for small businesses, is having its business and assets sold by administrators after falling £5.8m into debt.
Administrators Antony Batty and Hugh Jesseman, of Antony Batty & Company LLP, report ‘considerable uncertainty’ as to whether the company can recover money it was owed by its clients.
Lawbit provided legal services through a Solicitors Regulation Authority-regulated firm, Lawbriefs Ltd, but the regulator swooped in to close down the new-model firm in October. Companies House documents showed Lawbit had book debts of £91,890, a ‘significant proportion’ of which the administrators believe may relate to services provided by LawBriefs.
In an administrators’ progress report, Batty wrote: ‘There is also considerable uncertainty as to the position of debtors previously reported, as the company provided back office functions on behalf of LawBriefs, which was subject to an SRA Intervention. This effectively brought LawBriefs’ operation to an end. This situation has potentially rendered any intercompany debtor amount uncollectable, and any amounts due from LawBriefs clients which had been billed by the company are likely to be difficult to recover.’
Meanwhile, the search continued for a buyer for the novel online legal services platform LawBite, which had been widely marketed on the Deal Opportunities platform, a specialist website for the marketing of businesses and assets. Around 15,000 emails had been sent in a targeted marketing campaign by Axia Valuation Services and the Batty’s agents confirmed they received 17 ‘serious expressions of interest’, with several more coming via third parties. LawBite founder, barrister Clive Rich, has been assisting with the sale process.
But Batty added ‘considerable difficulty was encountered in obtaining suitable access to the source code and securing this to my agent’s satisfaction. This access was required both to enable my agents to properly evaluate and market the software platform, but also to allow access as appropriate to interested parties as part of sale process’, Batty explained. ‘Inevitably, the delay in obtaining the access required has hindered the marketing/sale process and this process continues.’
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