ISOCO4 Limited

ISOCO4 Limited (the “Company“), a law firm merger broker with an interesting business model, was recently acquired out of administration by way of a pre-pack sale.

The Company was incorporated in August 2017 to aggregate and improve (through investment in technology and recruitment of younger lawyers with more modern working practices) established, profitable High Street law firms with owners seeking to retire or simply not wishing to run the businesses anymore. The Company would retain the local brands and build on that existing reputation and goodwill. The business model was dependent on the acquired firms generating enough income to enable the businesses to continue to operate and to buy out the former owners.

The Company’s directors looked at many law firms during 2018 and 2019, but very few firms were suitable. Often the firms came with the potential for large dilapidation claims arising from the premises which they had occupied for very many years, or the business was so small and the principal so integral to its operation that its survival beyond the retirement of the owner would have been unlikely. Some businesses had poor negligence claims records and some owners were unlikely to fit into a bigger organisation or one where they were not in charge.

Ultimately, two suitable businesses were identified and acquired in November 2019 and October 2020, The Hillman Partnership (“THP“) and Pooleys Solicitors LLP (“Pooleys“), both of which were based in Swindon. The Company also took the opportunity created by the closure of a firm in Berks/Bucks to take on its Beaconsfield office and sole member of staff, who was an experienced conveyancing solicitor. In each instance, the Company continued to trade under the name of the local firm which it had acquired.

By late 2020, the Company employed around 30 people. Each office used its own Accounts/Practice Management System and, while steps were taken to migrate these systems, integration proved difficult, not least because of the pandemic and the inability of the software providers to conduct training on site. It was not until the late summer of 2021 that the directors were able to measure office and individual performance in something close to real time, and it became apparent that two offices, Carterton and Beaconsfield, were losing money heavily and consistently. Both offices were closed in November 2021.

In September 2021, the Company decided to consolidate the two Swindon offices, THP and Pooleys, into a new, modern office and to rebrand the combined Swindon business as “Hillman Pooley.” This meant that by the end of November 2021, the Company had only one practicing address. There were costs associated with the move (additional IT, office furniture, removals and clearance etc.), but the costs savings to be gained from the move have been slow to materialise. Some redundancies had to take place with considerable associated costs.

The Company continued to struggle with cash flow and confirmed that it had undertaken an investigation into its financial affairs and considered that it was insolvent, It entered administration on 9 August. Prior to the administration, the business was marketed for sale, which resulted in two interested parties submitting formal offers. On her appointment, the Administrator entered into a pre-pack sale of the business to Axiom DWFM Limited. The purchaser bought the business with a view to carrying it on as a going concern and as a successor practice.

In accordance with the Solicitors Regulation Authority Rules, a Solicitor Manager has been appointed to supervise the transfer of client balances to Axiom. Presently, 30 clients have given their express consent for their matters to be transferred to Axiom, 19 clients have not yet consented and 8 clients have expressly refused their consent.

Isobel Brett of Bretts Business Recovery is the Administrator. She is assisted by Andrew Gregory of Leonard Curtis Legal (Solicitor Manager) and Tees Solicitors (legal advice in relation to validity of charge).

The Administrator’s Proposals can be found HERE.