Mergers, ownership changes, insolvencies and outsourcing projects all create pressure to move large numbers of client files at speed. It’s tempting to treat the exercise like warehousing: count the boxes, load the van, Bob’s your uncle.
However, bulk file moves are not just logistics exercises, and the risk of this approach in professional services is obvious. Clients become units, not people. This piece offers a practical framework to keep ethics front and centre while getting the job done efficiently.
The SRA Warning Notice
In June 2024 the SRA issued a Warning Notice on mergers, acquisitions and sales of law firms. It’s blunt on the central risk: don’t treat client files as a commodity to be bought and sold. Solicitors must keep clients’ interests at the forefront, obtain properly informed consent (with a reasonable time to decide), and ensure the receiving firm has the competence, systems and capacity to take the work. The notice also highlights protections for client money, will banks, and the extra safeguards expected in insolvency or pre-pack scenarios.
Ethical starting point: clients are not inventory
Client autonomy and informed choice come first. Your duty is to act in each client’s best interests, not solely in the commercial interests of the your firm, a seller, buyer or lender. This independence really matters: getting a deal done should not narrow the options you present to the clients.
And when a client exercises their rights by declining to move to the firm of your choosing, you still owe them professional duties.
Regulatory issues you must address:
- Client care and service: give clear, early information about what’s proposed, why, the alternatives, how costs may change, and what happens if the client says no.
- Conflicts of interest: you may need to re-run conflicts at the destination firm. Law firm mergers and M&A can create conflicts you didn’t have yesterday.
- Confidentiality and privilege: initially, share the minimum data necessary to progress the deals and assess conflicts. If the receiving firm wants full file access, it requires express client authority.
- Competence and supervision: ensure the receiving team genuinely has capacity and relevant expertise. Sending a client to shoddy outfit is not acting in their best interests.
- Costs and retainers: be explicit about whether the retainer will be managed, any hourly rate changes, how the move affects funding arrangements and so on. Will the receiving firm impose any contractual terms that put the client in a less favourable position (e.g. access to lower insurance cover)?
- Complaints and redress: tell clients how to complain if they are not happy about the transfer.
- Records: keep an audit trail of decisions, approvals and key communications.
Consent process that respects client choice
The gold standard for obtaining client consent is opt-in: a clear invitation, time to decide, and nothing moves until the client says yes. Reality sometimes pushes towards opt-out (e.g. administrator timetables; a struggling firm about to implode). If you must rely on opt-out, build safeguards. For example:
- plain-English notice, prominent and repeated across communication channels
- enough time to respond (days, not hours)
- a genuinely easy decline route
- reassurances that the service continues with the new firm, or that a safe home exists if they refuse consent
- ensuring the destination firm attempts to take retrospective consent, once the urgency has passed
For vulnerable clients, you will likely have to adapt the communications, extend timelines, consider phone calls or in-person explanations.
Finally, include an assurance that declining the move won’t prejudice urgent steps, court deadlines or limitation dates.
A practical transfer workflow
- Scope and risk assessment – Define which matters are in scope. Triage for deadlines, limitation, live court directions, sanctions exposure, and other risk items. Identify vulnerable clients and regulator-sensitive workstreams.
- Destination due diligence – Check competence (domain experience), capacity (people, bandwidth), controls (PII, supervision, conflicts, data security). Don’t be shy about asking for evidence.
- Conflict-check workflow – Run a minimal dataset through conflicts before any detailed disclosure.
- Consent pack – This could include a client letter, FAQs, decision form. Use plain English in all comms. Set out options (move, stay, move elsewhere), the costs impact, and complaints route. Provide phone and email contacts.
- Timelines and reminders – Offer a reasonable decision window and one or two neutral reminders. Record non-responses and apply your chosen rule consistently.
- Data transfer mechanics – Use secure portals or encrypted transfer. Log who accessed what and when. Keep a manifest of documents moved.
- Supervised handover – Name the day-to-day contact at the destination. Hold a structured handover call for complex matters. Record action points and responsibilities.
- Post-transfer audit – Sample the transferred files for quality and service continuity at 2–4 weeks. Track complaints and near-misses. Report learning to the board.
