The SRA is not alone in possessing a focus and principles that originated in the good times. Remember when the Financial Services Authority was keen not to hamper financial ‘creativity’?

In that environment, professional firms were deemed by lenders and other creditors to be one of the safest business-bets around. Hence the SRA’s single-minded and entirely fitting preoccupation with protecting client money when firms failed. The Cobbetts pre-pack deal achieved this, and, caring more for lawyers’ welfare than they get credit for, people at the SRA will also be pleased that over 400 jobs were saved in the process. R3’s president writes in defence of pre-packs in Comment.

However, the nature of this deal does raise wider questions for the profession. Creditors will likely recover only 2p in every pound they are owed; and this from a firm that was declaring itself a ‘steady ship’ as recently as December. Regulatory demands are such that it is impossible to run a law firm in administration for anything but the shortest of periods, making a pre-pack or liquidation the only options for a firm in trouble.

Rules designed to support ‘stability’ thus have unintended consequences. ‘Recovery of 2p in every pound’ is not a phrase banks or landlords want to see near a large commercial law firm.

One would not be surprised were the cost and availability of finance for firms to rise in the aftermath of this rescue – which will hardly be helpful for other firms seeking to prosper in an extremely tough market.