Hill Dicks sets up project team to pick off Halliwells' assets

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Peter Jackson, managing partner, Hill Dickinson

10:36 am, June 22, 2010
Hill Dicks sets up project team to pick off Halliwells' assets

By Michael Fahy

Law firm Hill Dickinson is understood to be lining up a deal to buy the assets of Manchester-based law firm Halliwells.

People familiar with the situation have told Crain's that partners at the practice have set up a team known as Project Bolton to buy Halliwells' assets following a series of meetings between the firms.

If the deal comes off, it would lead to Hill Dickinson's Manchester-based staff relocating to Halliwells' 3 Hardman Square offices at Spinningfields.

The deal under consideration could involve dissolving Halliwells LLP, which has more than 900 partners and staff.

Halliwells has suffered from a series of partner defections in recent months. Its last filed accounts for the year to April 30, 2009, showed profits had dropped by to £17.9m and that its income had fallen by 5 per cent to £77.8m.

More worryingly, its net debt had risen by £780,000 to £25.4m. It also renegotiated a three-year deal with its principal lender, Royal Bank of Scotland, to whom the firm owes £20m. The bank holds a debenture over all of the firm's assets.

Since 2008, Halliwells has been through several rounds of redundancies which saw the number of employees, not including partners, plummet from 1,221 to 875. The firm has also suffered from a number of partner defections, and earlier this month last Legal Week reported that the firm has delayed repaying some of its professional practice loans in a bid to keep cash in the business.

Halliwells cost base increased dramatically since the firm moved into 3 Hardman Square in December 2007, bringing 700 Manchester-based staff under one roof. The firm negotiated a five-year rent free period and a 15-year lease, enabling partners to share a £17m reverse premium from landlords Allied London.

However, Halliwells has never been able to fill all of the space it took and the lease liability became an albatross around its neck.

When contacted by Crain's this morning, Halliwells declined to comment.

Hill Dickinson's managing partner Peter Jackson this morning said there were “no merger discussions” taking place between the two firms. He declined to comment further.

COMMENTS? mfahy@crain.com