News In Focus
Biggest law firm insolvency as KWM LLP enters administration
King & Wood Mallesons LLP, the UK and Europe division of the global law firm of the same name, entered administration yesterday in what has been described as the biggest ever UK law firm collapse.
The move followed a rapid decline for the firm since last October, when partners failed to approve a recapitalisation scheme. More than 50 partners left in the year to November 2016, and 90 during the calendar year. The first notice of intention to appoint administrators was filed in December, shortly after staff were told that salary payments could not be guaranteed after January. Last week KWM admitted that it could no longer pay salaries at all.
Poor management and high partner earnings together with a decline in core funds management and private equity work have been blamed for the decline.
Headquartered in Hong Kong, the global practice resulted from the 2013 merger of firms including "Silver Circle" London practice SJ Berwin, Mallesons Stephen Jaques, a Big Six Australian firm, and leading Chinese firm King & Wood. As at March 2015 it was the sixth largest firm in the world by number of lawyers (2,700) and one of the top 30 by revenue, at around $1bn.
A number of other firms have offered places for trainees whose contracts have been cancelled.
KWM's China arm continues to trade with a limited European presence of 30-40 lawyers.