Cobbetts LLP, which has nearly 500 employees in four offices, will become the first major U.K. law firm to seek protection from creditors since 2010.
The firm, the 62nd-largest by revenue in the U.K., said the weak economy led it to the decision to appoint administrators to find a buyer.
“The appropriate course at this time is for the firm to obtain the protection of an interim statutory moratorium to enable a sale of the business,” Cobbetts said in an e-mailed statement.
“We are in an environment where the legal market across the U.K. looks pretty flat,” said Tony Williams, principal at Jomati Consultants LLP. “Winners and losers are starting to emerge and Cobbetts is a firm that was squeezed from all sides.”
Halliwells LLP went into administration in 2010 in the face of mounting debt and a string of failed merger discussions. U.S. law firm Dewey & LeBoeuf LLP filed for bankruptcy in May after its chairman was ousted, almost all its partners quit and creditors began suing for unpaid bills.
Cobbetts, known for its real estate and mid-market corporate work, had revenue of 45.4 million pounds ($71.7 million) in the 2011-12 financial year, making it the 62nd-largest U.K. law firm, according to Legal Business Magazine. The firm had offices in Birmingham, Leeds, London and Manchester.