Recruitment

Introduction

Over a number of years we have developed the skills, expertise and contacts to assist your recruitment business. We pride ourselves on having an understanding of the trends in the recruitment sector and appreciating the challenges that are faced by those operating a recruitment agency. 

Our experience ranges from small recruitment agencies to large and highly specialist businesses across diverse sectors of the industry. 

Examples of the different recruitment sectors in which we have advised businesses include:

• Executive search and permanent placement
• Recruitment process outsourcing (RPO)
• Temporary and contract placements
• Fixed fee online recruitment
• Facilities management

The situations in which we have provided advice include:

• Start-up and new business ventures
• Growth and financing
• Expansion and acquisition
• Sale and exit
• Reinvestment of their sale price back into a new venturen for the entrepreneurial recruitment company owner

Start up and new business ventures

Our sector specialists are experienced in the challenges faced by any new business in the recruitment sector. Whether this is your first business or you are an experienced entrepreneur, we can help with the first stages of your new business, including:

• Investment and shareholder agreements
• Incorporation
• Company secretarial
• Joint ventures
• Regulatory compliance, including under the Agency Worker Directive (AWD) and Gangmaster Licensing Authority (GLA)
• Employment contracts for consultants and other staff
• Advice in relation to past employment restrictive covenants and confidentiality obligations

Our commercial lawyers also have experience of a range of terms of business and contracts for recruitment businesses, including:

• Supply of temporary and contract staff
• Master vendor and sub-contract arrangements
• Recruitment Process Outsourcing (RPO)
• Executive search and permanent placement

Case study

Our lawyers assisted the launch of adigital media recruitment agency,providing advice in relation to:

• the founder’s exit from his previous role and the scope of his restrictive covenants
• a shareholders’ agreement between the founder, management and investors
• incorporation of the new company and opening of bank accounts

Growth and financing

As your business grows, the areas in which you require advice will change. At Morrisons we have depth and experience helping recruitment companies take the next step in their development.

Our services include:

• Leases: Advice on office leasehold and freehold acquisitions and providing reports about the implications of any leases relating to your business
• Data protection and confidentiality: Protection of your vital information and databases, while ensuring compliance with the Data Protection Act requirements
• Website and new media: We have expertise in all aspects of establishing and maintaining a website. This is particularly important for businesses offering online services, job boards and uploading of client and candidate information.
• Financial: Our corporate team can advise on any legal aspects in relation to a company’s finances, from core banking facilities and personal guarantees, to rescue and recovery of insolvent and cash-strapped companies
• Employee incentives: Including share schemes, bonus schemes and other cash and non-cash incentive arrangements
• Disputes and debt recovery: Our dispute resolution team handle many different claims by and against recruitment companies, from debt recovery to complicated claims relating to brands and intellectual property.

Case study:

Morrisons was approached by an existing recruitment company to assist with the legal aspects of a new website offeringfixed fee recruitmentservices. 

In a very short timescale, we were able to provide terms and conditions for three different levels of online service, terms of client and candidate use for access to the website, as well as fair use and privacy policies to comply with the Data Protection Act.

Expansion and acquisition

The growth of a recruitment business can be accelerated by either the lateral hire of senior recruiters and their teams or the purchase of an entire business or company.

Lateral hire

Taking on a senior team – to bring a critical size to a recruitment company or bring access to a new sector or market – often appears the cheapest and simplest approach. It is, however, important to take legal advice in relation to such hires, particularly in areas such as the enforceability of incoming team’s restrictive covenants.

Corporate

A ‘Buy and Build’ strategy can be the fastest and most effective manner of growing a sizeable and competitive recruitment group.

Morrisons work closely with advisers across the recruitment-focused corporate finance community, nationally and internationally, to ensure our clients’ opportunities for expansion can be met.

The corporate team will advise and protect you in relation to all legal aspects of a deal, including non-cash consideration, earn-out and deferred payment arrangements and provision for completion accounts.

Case studies:

Recently, Morrisons advised transactions including:

• Purchase from administrators of insolvent financial sector search company, including a  refinancing of the company and restructuring of its workforce
• Three back-to-back UK acquisitions for Eastern European recruitment group
• Purchase for the UK arm of a Japanese listed recruitment group of an Australian financial recruitment specialist

Sale and exit

The ultimate ambition of many owner-managers is to grow and sell their company. But often finding the right buyer and concluding a deal is more than just a financial decision.

An owner manager seeking a sale will want to ensure their employees are looked after and have assurance the company will continue to flourish under new owners.

The options at this time are more than just a trade sale to a larger competitor. Other possibilities include:

• Management buy outs (MBOs) or buy ins (MBIs)
• Flotation on the AIM markets or other exchanges
• Saleof only part of the company. For example, a staged exit where management takes a small interest immediately but receives options to buy the rest of the company at a later date

Morrisons recognise that this is an important time for any business owner. You will need a comprehensive service from a team of solicitors who understand both the sector and the pressures facing a business owner through the process.

Working with specialist corporate finance advisors, we will be able to take you through every stage of a sale, from initial enquiry through to completion.

Case studies:

Our solicitors’ recent experience of recruitment company sales include:

 Staged disposal of equity shareholdings of Alpha Facilities Management, a combined recruitment/facility management provider, to private equity backed acquirer Aktrion Group

Sale of a multinational recruitment process outsourcing business for in excess of €10m

Reinvestment

We have seen many recruitment entrepreneurs sell one business and use part of the proceeds to establish another.

The second time around – or, indeed, the third and fourth – will often result in even greater success as a result of lessons learned from past experiences.

Nevertheless, the experienced team at Morrisons still has a great deal to offer in such situations. Many of our most successful clients will return to us for advice where they know we can add value, often in relation to:

• Shareholder and investment agreements
• Advice in relation to past non-compete restrictions and confidentiality obligations, especially where these have arisen following a past business sale
• Enforcement of their rights under a share sale agreement, particularly where a dispute may affect the funding available to the next venture.

As your business develops, the Recruitment Sector Team at Morrisons will be available to support its growth, acquisitions and, ultimately, the next exit.