Another recruitment acquisition over the line, delivered by the recLAW team 🎉 

We’re delighted to have acted for Poonam Mawani and Adil Mawani on the sale of Azuki Accounts to TC Group. They join Recruitment Accountants, its specialist division for the recruitment sector, in a deal that completed on 18 September. 

The Deal

Azuki Accounts is a specialist finance partner for recruitment agencies. Founded in 2016 and based in Middlesex, it runs the entire finance function for recruitment businesses. This includes pay and bill, contractor finance, bookkeeping, credit control, board packs and FD-level support. 

That is a business built for one sector and nobody else.

So is the business it now joins. 

Recruitment Accountants, a specialist division under the TC Group, has spent over 15 years working with the recruitment sector, supporting more than 100 recruitment businesses across the UK with accountancy, tax, payroll and advisory services. It was also recently named APSCo Partner of the Year.  

Together they now support more than 150 recruitment businesses across the UK. 

The Team Behind the Deal

recLAW’s Barry Cullen, Rachel Landy and Cameron Malcolm acted for the sellers, taking the sale from first instruction through to completion. 

It goes without saying that a sale like this is rarely just the sale agreement. Employment, commercial and client contract questions all surface at the same time. Having a team who work in this sector every day is what stops those questions slowing a deal down. That is what we bring to every transaction we run. 

“A sale starts years before anyone makes an offer. It starts in how the business was built, who owns what and whether the contracts say what you think they say. Azuki had all of that in order long before the approach came.”  Barry Cullen, Partner & Solicitor at recLAW 

Thinking about buying or selling a business in the recruitment sector?

Explore our corporate law services to see how recLAW supports recruitment businesses and the suppliers who serve them through sales, acquisitions and getting deals over the line. 

Ready to get started?

Send us an enquiry or call us today on 0203 778 0605. 

Barry Cullen sat down with Nitin Sharma on the latest episode of RecTalk for a full conversation on settlement agreements in recruitment.

If you’ve ever had to manage a top biller out of the business, fallen out with a business partner, or had a fee dispute drag on longer than it should, this one’s worth your time.

Watch the full episode here

What to expect from the latest episode

Settlement agreements touch more of a recruitment business than most owners realise. Barry and Nitin get into the lot…

When the exit comes back to bite you.

You agree a deal with an outgoing employee. You pay the money. Everything’s amicable. Then they come back asking for more, and legally, they can. Because without a proper settlement agreement and independent legal advice, that “very clear agreement” over email may not be worth much. Barry explains why the law works this way and how to do it properly.

When it makes commercial sense to settle.

Not every fight is worth having. Barry walks through the three big reasons to settle: your case is weaker than you think, the client relationship is worth more than the dispute, and control. Because if you both think you’ve got a 65% chance of winning, someone’s about to spend two years and a lot of money finding out who’s wrong.

Restrictive covenants get enforced more than you think.

“Not worth the paper they’re written on” is one of recruitment’s favourite myths. Barry shares real cases. One former employee paying £5,000 a month for 36 months to their old boss. Another fined £20,000 for breaching a court order, with the judge telling them they were “this close” to jail.

Taking legal advice from AI.

Barry’s now seeing opponents turn up to disputes armed with arguments their AI told them were watertight. It tells them they’re right, so they fight harder. Then a judge tells them the entire foundation of their case doesn’t exist.

The line that sums it up

 “With settlement, both sides need to be either as happy or as unhappy as each other.”

Most disputes become emotional before they become legal. The businesses that come out of them well are the ones that keep talking, keep the door open, and get the deal in writing properly.

Or, in the best advice Barry says he was ever given: agree a deal you could do on a handshake, then draft a clear, simple agreement to keep everybody honest.

Watch it

The full episode is on YouTube now: RecTalk with Barry Cullen

And if any of it sounds a bit too familiar, whether that’s an exit, a fee dispute, or a covenant that’s about to be tested, get in touch with our team.

Earlier is always cheaper.

 The Case

Our client had been supplying locum healthcare workers to a long-standing organisation for several years. When a senior consultant left the business and joined a competitor, our client expected some disruption. What they did not expect was what came next.

Within months, the entire pool of locum workers placed with that organisation had been transferred across to their new employer. Transfer fees totalling approximately £185,000 were raised. The other side disputed them.

Here is where it got complicated.

The organisation in question was not just one relationship. It was part of a broader group that represented a significant chunk of our client’s business. Pursuing the full £185,000 risked fracturing something worth considerably more than the invoices in dispute.

This is the kind of decision that keeps recruitment business owners up at night. Fight for what you are owed and risk the relationship or protect the relationship and take a hit on the debt.

The Result

• £110,000 settlement secured
• No court proceedings required
• Relationship protected for future business
• Evidence secured to pursue the ex-employee for breach of their restraints

The Takeaway

Not every case is about recovering the maximum possible figure. Sometimes the right outcome is a settlement that protects the business on both sides of the ledger.

What recLAW does in cases like this is give clients a clear view of where they stand legally so they can make a commercial decision with confidence. Our client knew what they could pursue. They also knew what they stood to lose. Armed with that, they made the call.

The settlement at £110,000 was not a compromise born of weakness. It was a strategic decision made from a position of legal clarity. And that is a different thing entirely.

For the other side, the signal was clear.

Transfer fees are enforceable and attempts to move workers across without settlement do not go unchallenged. What is more, the evidence gathered during this process leaves the door open to pursue the ex-employee for breach of their restraints.

That case is still to come.

Need legal support for your recruitment business?

Explore our services to see how recLAW helps recruiters resolve disputes, recover fees, protect their interests and get paid.

Backdoor hires are not new. Neither is the frustration that comes with them. A candidate placed, a fee agreed and then six months later you find out the client went around you.

But here is the part most recruiters do not stop to consider.

They may have made it happen themselves.

This is not about blame.

It is about understanding the commercial logic from the other side of the table. When a client weighs up whether to cut you out of the fee, the calculation is simple.

Best case, they save the full placement fee.

Worst case, they get caught and pay what they owed anyway. No penalty. No uplift. No consequence beyond settling the original debt.

So you can see why they try it.

Now add a discount into that picture. A client pushes back on your standard 25% rate and you agree 18% to win the business. That feels like a reasonable compromise in the moment. But what you have actually done is reduce the stakes even further. If they do not pay, they are losing less than they would have before you discounted and, in a market, where fees are already being squeezed, that matters.

Discounting is not the problem. Discounting without conditions is.

Every reduced rate should come attached to clear conditions.

• Payment within agreed terms.
• Notification of the hire within a set timeframe.
• Transparency on the candidate’s starting salary.

If any of those conditions are not met, the discount falls away and the full standard rate is payable.

That single clause changes everything because, if they chance their arm, the client is no longer taking a low-risk gamble. Instead, they’re choosing between paying the discounted fee or your standard fee. The incentive structure finally works in your favour.

Discounts are for good clients and good clients play ball.

Most terms of business in recruitment do not include this. Discounts get agreed informally, written in at a flat rate with no trigger clauses and no mechanism to reinstate the full fee. So, when something goes wrong, there is no legal basis to recover anything beyond the discounted amount.

Which means the problem was never the client. It was the paperwork.

Your terms of business should reflect the deal you actually agreed. If they do not protect your margin, nothing else will. Get them right first and everything else will follow from there.

Follow Barry on LinkedIn for more legal insights on the recruitment industry.

Another fee dispute resolved. Another recruiter paid.

In this matter, recLAW successfully secured a settlement that brought a long-running debt recovery case to a close, with a total recovery of £34,000 for our client.

The latest settlement payment of £22,000 followed an earlier recovery of around £12,000, taking the total amount recovered on the matter to £34,000.

By applying the right legal pressure at the right time, recLAW secured a settlement agreement that brought the dispute to a close without the need for court action.

During the course of the case, an attempt was made by the opposition to challenge the agreed fee structure after an initial payment had already been received. recLAW successfully resisted that challenge, protecting our client’s position and ensuring the agreed arrangements remained in place.

The Result

• £34,000 recovered
• Settlement agreement secured
• Client’s position protected
• No court action required

The Takeaway

Recovering a debt is only part of the job.

Protecting your position throughout the recovery process is equally important. Challenges can arise long after liability has been established, particularly when significant sums are involved.

By taking early action and maintaining a clear legal strategy, disputes can often be resolved commercially, avoiding the time, cost and uncertainty that comes with court proceedings.

This case is a reminder that not every dispute needs to end up in court to achieve a successful outcome.

Need legal support for your recruitment business?

Explore our services to see how recLAW helps recruiters resolve disputes, recover fees, protect their interests and get paid.