On 24th September 2024, two of our Licensed Insolvency Practitioners, Antony Batty and Hugh Jesseman were appointed joint administrators of Lawbit, the online service offering legal advice for small businesses, when it went into company administration.
Lawbit’s Founder and chief executive Clive Rich told the Law Gazette recently that the appointment of administrators:
“….is part of a positive restructuring and investment plan,” that will enable the business to “continue with its mission to provide fast affordable law to SMEs via its tech/AI, in the UK and the US.”
Whilst the company administration process is now underway, the company’s subscription service, LawBite, continues to operate and provide legal advice through the Solicitors Regulation Authority regulated firm, Lawbriefs.
About Lawbite
LawBite was set up in 2014, offering a subscription service with four tiers of legal advice to small and medium-sized businesses.
The LawBite secure platform enables clients to communicate with their lawyer, in a faster and more affordable way than traditionally, whilst being kept up to date on their case via an easy-to-use dashboard.
Why Company Administration?
In an earlier article by one of our partners, Nitin Joshi, about administration, ‘Shelter from the storm – Company Administrations give breathing space’, we have described administrations as being a shelter in the storm, giving the breathing space that insolvent companies need when under creditor pressure.
This breathing space, or moratorium, gives companies time to explore rescue and restructuring options. In most cases, this prevents insolvency proceedings against the company and stops creditors exercising their rights, such as issuing petitions for winding up or suppliers trying to invoke their retention of title clauses and recover goods for which they have not been paid.
There are three main statutory purposes of administration:
- Rescuing the company as a going concern, or
- Achieving a better result for creditors than would be likely if the company were wound up, or
- Realising property in order to make a distribution to one or more secured or preferential creditors.
In the case of Lawbit, we are right at the beginning of the administration process, and as Clive Rich has said regarding the possibility of a restructuring plan:
“We will bring you more details on this intriguing opportunity as they are released to us.”
As Nitin Joshi says:
“Where there is a viable underlying business, seek an administration moratorium and get some breathing space to think about options.”
