A firm that positioned itself as one of a new breed of legal services provider has been bought out of administration after attempts at rapid growth fell short.
AKHQ Limited, trading as April King, was acquired by April Legal Limited after the company went into administration.
The deal ensures the entire 25-strong team of solicitors, legal executives and paralegals transfer to a new company which will continue to trade as April King and provide continuity of service for clients.
According to a report prepared by administrator Begbies Traynor, the company was incorporated in 2012 by director Paul King and grew steadily for several years, becoming a well-established legal practice specialising in private client work and in particular wills and lasting power of attorney. It was not a regulated law firm and marketed itself as a less intimidating and expensive alternative to a traditional practice.
By the end of 2017 the company had achieved £1.2m turnover. It operated from leasehold premises in Nottingham, with serviced office rentals across the Midlands and in Manchester.
In February 2018 April King started to recruit more staff and advertise in the national press, and turnover grew to £200,000 a month with staff employed in London, Newcastle and the south coast.
But this year unexpected resignations from several senior fee-earners hit income: it closed serviced offices and moved to a ‘home based’ adviser business model. However the company was locked into expensive lease and business rates liabilities, and by the end of October client enquiries had ‘dramatically reduced’. Several staff were made redundant and King had to inject cash to enable the company to continue. Administration followed when creditor pressure escalated, with threats of legal and enforcement action by HMRC.
According to the administrator’s report, April Legal Limited has paid an initial £8,000 for the business and its assets, with a further £72,000 paid over the next nine months.
Claims of unsecured creditors have been estimated at around £538,000, with an as yet unspecified dividend set to be paid to those owed money.
King told the Gazette that the focus will be on continued investment in the team and using technology alongside providing a face-to-face service to clients under a new business model.
King said that new Solicitors Regulation Authority rules allowing solicitors to work as freelancers or in unregulated firms gives the company access to a wider pool of talent. ‘This provides an opportunity to grow our team in a more flexible way and one that responds directly to the needs of our client base,’ he added.