Month: July 2026

On Law Firm Bankruptcies and the Law Firms of the Future

You never imagine that a 160 year old law firm would file for bankruptcy.

That’s why the Daily Memphian’s recent story about the Apperson Crump law firm’s Chapter 11 bankruptcy was such a surprise. This wasn’t some start-up law firm that couldn’t navigate choppy waters; it was founded in 1865 and billed itself as “the oldest continuously operating law firm in Memphis.” The news story was as much about the storied history of the firm as it was about the bankruptcy filing.

On paper, running a law practice seems, frankly, pretty simple. You bill hours, collect fees, and spend less than you collect.

By year 160, what could have tripped them up?

In reality, it’s not that simple. Per the bankruptcy filings, reports the Daily Memphian, the firm suffered a drop in annual gross revenue from $4.45 million in 2024 to $2.01 million in 2025. The firm listed roughly $1.39 million in assets (generally accounts receivable) against $2.7 million in debt. The article suggests that the end was hastened when 7-8 lawyers and 24 staff members left to open a competing firm in 2025, and the remaining 16 lawyers quickly shrunk to 6, in a 15,000 square foot office. The Daily Memphian notes that an eviction lawsuit had been filed.

By the end, the article notes, the firm owed $857,700 to its largest creditors, including its information technology service Adan Technologies, FedEx, Thomas Reuters, and its landlord Boyle Investment Co.

My firm is 6 years old. I look at this and ask “What happened?”

Right out of school, I was hired by a small firm (2, then 3 lawyers), and it was run like a very small business, where every penny was pinched. Paychecks were hand-written by the boss himself. Printer cartridges were not replaced until they had been shaken dozens of times, in order to buy a few more days (or weeks) of printing. Westlaw? Nope; I’d walk and use the courthouse library (which, honestly, was great).

After 7 years there, I was excited to move up to a 40 lawyer firm, to see how “big law” did things.

I got a quick education in law firm management: At the end of my first quarter, I’d billed enough hours to trigger a performance bonus. I didn’t receive it. Instead, I got an email that pointed out the fine print in my offer letter, that the bonus was “conditioned on the firm having sufficient revenue.” My mind was blown. It never occurred to me that they wouldn’t have the money.

Maybe bigger isn’t always better. That firm was run like a big firm, even when the revenue didn’t support it.

Whenever the the younger lawyers asked why the firm did certain things a certain way, the leadership response was pretty specific: “Nashville has lots of law firms. If you don’t like how we do it, you can go work at one of the other ones.” Soon, we quit asking questions.

Ask me how many really good lawyers grew a thriving practice at that firm and then left.

Looking at the list of creditors in the Apperson Crump story, I’m a bit surprised by how boring it all is. No gambling , embezzlement, or extraordinary debts. Just the types of debts you’d expect to see in a law firm bankruptcy filing.

I wonder if the “old fashioned” way of running a law firm was part of the trouble. The big office space. The expensive Westlaw subscription. The heavy IT and computer expenses. Lots of partners. Add in a 2 to 1 staff to lawyer ratio, and it’s easy for expenses get ahead of income.

The mass defection of lawyers also can’t be ignored.

Maybe there’s no single lesson to be learned here.

Modern law firms are in uncharted waters. COVID-era advances in working, technology, and the reduction in hard costs have drastically decreased the complexity and cost of operating a law firm. The post-COVID generation’s shift in mindset matters too; lawyers–even successful, partner level lawyers–are more likely to jump ship than ever before. Legal AI is here to stay and can’t be ignored or vilified any longer. The jobs lawyers have today may look totally different in 10 years. Lawyers have to be open to innovation and change more than they ever have been.

Law is a stubborn industry, grounded in tradition and “the way we’ve always done things,” but law firms have to abandon that approach to stay relevant over the next decade. This is no longer about preserving the status quo and partner origination percentages; it’s about staying in business.

Over the past 15 years, there has been lots of talk in the industry about “succession planning,” i.e. the transition of the law firm management from the old guard to the next generation of leaders. In my experience, law firm management doesn’t transition from the old guard. Instead, the old guard just holds on (way too long) and then sells the law firm to a bigger law firm that has either figured it out or can impose an economy of scale (and higher rates) to paper over the gaps.

I don’t know if that’s what happened in Memphis, but that’s part of what I’m taking away from it all.

For me, I’m not looking to sell any time soon. I’ll be here, pinching pennies and shaking laser cartridges, hoping to buy a few more years of practicing law in Bankruptcy Court (and not appearing as a debtor there).

Tennessee’s Registered Agent Loophole Needs A Better Fix

Someday, I’m going to run for public office in Tennessee, and the legislation that I will work on will be the most boring, non-headline-generating, administrative laws you’ve ever seen. But I’ll win 100% of the lawyer vote.

We need to fix Tenn. Code Ann. § 48-15-101, the statute that defines who can serve as a registered agent for a corporate entity in Tennessee and requires every corporation to maintain one at all times.

The stakes are high because of Tenn. Code Ann. § 48-15-104(a), which governs service of process. In layman’s terms, a corporate entity does not have “hands” into which a plaintiff can serve a lawsuit, so this statute requires that the company designate a specific “individual who resides in this state” (§ 48-15-101(a)(1)) to serve as those hands.

But, the statute also allows a registered agent to just be another corporate entity, which, itself, may or may not have an individual listed as its registered agent. See Tenn. Code Ann. § 48-15-101(a)(2).

That creates a gap. What if that second entity has no individual serving as its own registered agent and, instead, just lists another LLC (and so on)? Worse, what if an LLC simply lists itself as its own registered agent? If no individual is ever named in the chain — or the registered agent is the LLC itself — who is there to serve? (Spoiler-alert: Nobody. Service becomes impossible.)

The same gap opens if a registered agent resigns and, despite Tenn. Code Ann. § 48-15-101(b), the corporation never names a replacement.

Tenn. Code Ann. § 48-15-101 should require that, when another entity serves as registered agent, some minimal standard ensures an actual individual — or at least a legitimate, service-able corporate entity — stands behind it. Without that, the Secretary of State is effectively handing sloppy (or clever) entities a permanent way to dodge service of process.

The only fallback is Tenn. Code Ann. § 48-15-104(b), which provides that when a corporation “fails to appoint or maintain a registered agent in this state,” or when “its registered agent cannot be found with reasonable diligence,” the Secretary of State becomes the corporation’s agent for service. Tenn. Code Ann. § 48-15-105(a) then governs the mechanics: the plaintiff identifies which § 104(b) ground applies, and the Secretary of State sends process “by registered or certified mail” to the corporation’s registered office.

But that’s a workaround, not a fix — and plaintiffs shouldn’t have to invoke it just because Tennessee’s registered-agent statute lets entities hide behind entities with no individual, anywhere, ultimately accountable.

Plus, with all due respect to our very smart Tennessee Secretary of State Office, the law isn’t clear, and, at best, this introduces a great deal of uncertainty and delay when this fairly common problem presents itself.

The General Assembly should amend § 48-15-101 to require that whenever a corporate entity names another entity as its registered agent, the filing must, somewhere, identify a natural person and a physical Tennessee address where that person can actually be found — either directly, or by reference to the designated entity’s own registered-agent filing.

The amendment should also bar an entity from naming itself as its own registered agent, closing off the most obvious version of this loophole, and direct the Secretary of State to reject filings that don’t ultimately identify an individual or a legitimate third party corporate entity.

This shouldn’t be controversial; it just extends the “individual who resides in this state” requirement through any layers of entity-agents the statute already allows.

Until then, plaintiffs are stuck relying on the Secretary of State as substitute agent under §§ 48-15-104(b) and 105(a) — a real remedy, but one that only kicks in after the time and expense of proving the primary agent can’t be found.

(Side note: I was going to upload an image of a snake eating its own tail, but everything I found was disgusting.)