Semple Fraser, which has offices in Edinburgh, Glasgow and Manchester, is likely to shut for business over the next couple of days following the move.
Speculation had been mounting that the firm was to be broken up with mergers deals being sought with three rival companies, in a move likely to secure jobs.
But staff were dealt a serious blow when they received an email from managing partner Simon Etchells this morning outlining the intention to appoint administrators.
Mr Etchells said: “It is with great regret that after having considered every possible option to secure the future of the business it was clear that administration is the only option.”
Semple Fraser LLP was formed in 1993 and has 20 partners and around 100 staff. The firm focused on a number of specialist sectors, including property, renewables, construction, finance and waste, and had grown to become one of Scotland’s leading commercial law practices.
It flourished during the property boom and maintained strong business activity during the crash given the number of property companies being sequestrated. However, it is thought the company has been left in a vacuum as this line of business dries up.
A statement from the company added: “The firm has been severely affected by the downturn in the economy and the dramatic contraction in parts of the corporate, property and construction sectors in particular. Following an exhaustive review of the business, the Partners have decided that the business is no longer sustainable.”
A source at the firm described the mood amongst staff at the firm today as ranging from “depressed to very angry.”
Some have complained about a lack of clarity over the move with workers unclear at present of their entitlement to redundancy payments.
An administrator is likely to be rapidly put in place with the door then to shut on the business.
Law firm cannot legally operate once administrators are called in.
Lorna Jack, chief executive of the Law Society of Scotland, said: “It is very sad news to hear that Semple Fraser is to go into administration. Many law firms have struggled during the economic downturn, however that is no consolation to those who make the difficult decision to close their business and the impact it has on their colleagues. It's our understanding that the partners at Semple Fraser have explored and exhausted all options to try to secure the future of the business but, unfortunately, administration is now the only route available.
“Clients of the firm can contact their usual partner contact, or Managing Partner Simon Etchells, if they have any enquiries or concerns. We would encourage any solicitors or trainees affected by today's announcement, who are seeking support or advice to contact the Law Society's professional practice and support team on 0131 226 7411.”