In depth: Another accumulator firm goes under - reviving tough questions for the SRA

In December last year, the Solicitors Regulation Authority said it was looking at whether to sharpen its oversight of firms which significantly change their profile through acquisitions. That ‘whether’ now appears redundant. 

On Wednesday evening the regulator announced an intervention into the PM Law Group and its network of firms after the group abruptly shut down on Monday. The SRA had been under pressure to take decisive action beyond its comment on Monday that it had received calls suggesting the firm had ‘not closed in the manner we would expect’.

In an updated statement, the SRA said it had been alerted to the unexpected closure on Monday and launched an immediate investigation. The regulator confirmed yesterday that PM Law leaders had self-reported the firm’s imminent demise, in accordance with their regulatory obligations. 

The intervention is likely to be one of the most extensive and costly ever handled by the SRA, involving offices spread across as many as 20 sites. Files and client accounts can now be seized and held securely. Bradford firm Gordons has been appointed as the intervening agent and a dedicated email address, PM@gordonsllp.com, created to handle client enquiries.

SRA chief executive Sarah Rapson said: ‘We have acted quickly and decisively to protect the interests of clients. The sudden announcement from PM Law on Monday that they had closed is troubling news and I fully sympathise with the clients of the firm. Many of those involved are buying and selling a house or dealing with personal injury claims. These matters can be stressful enough without the added complication of your solicitor’s firm closing during the process. 

‘While we cannot disclose information about an ongoing investigation, we are working quickly to gather all the relevant information and provide answers to those that have raised important questions about their ongoing matters with the firm. Finally, we also recognise that this is a difficult time for the employees of the firm who have sadly lost their jobs this week.’

'We have acted quickly and decisively to protect the interests of clients. The sudden announcement from PM Law on Monday that they had closed is troubling news'

Sarah Rapson, CEO, Solicitors Regulation Authority

PM Law Group was founded in 1990 and has grown in recent years through a series of acquisitions – usually high street firms across Yorkshire, Derbyshire and Cumbria.

One such purchase was Derby firm John M Lewis & Co. This was acquired in February 2023, with directors Lisa Wills and Elizabeth Knott relinquishing significant control and Jonathan Bostock, PM Law Group chief executive, appointed as company secretary. Proddow Mackay Solicitors LLP became the majority owner of the business.

At the time, Bostock said: ‘We continue to look to expand our business with either acquisitions or joint ventures in localities we have so far not reached and have devised models to try and help those firms by reducing their regulatory burden while allowing them to keep their independence. We’ve partnered with other firms this way and it’s working very well for all parties, so we’re on the lookout for more.’

As part of its expansion plans, PM Law Group moved in 2024 into a new office at Meadowhall Business Park in Sheffield, occupying 7,500 sq ft on the ground floor.

Details emerged this week of a trail of intra-group loans between members of the group running into millions of pounds. The annual financial statement of Proddow Mackay Solicitors LLP, covering the year to October 2024, reveals more than a dozen outstanding interest-free loans between different entities operating under the same umbrella.

According to Proddow Mackay’s accounts, the business owed £1.9m to PM Law Limited and £571,000 to John M Lewis & Co Limited, which had become part of the PM group in February 2023. A further £185,000 was owed to Butterworths Law Limited, with sums of between £3,500 and £37,000 owed to four other companies in the group. 

At the same time, Proddow Mackay was itself owed £1.7m by Lexelle Limited, an insurance broker brought into the group last year, as well as £495,000 by Proddow Mackay Limited, £159,000 by Proddow Mackay Legal Limited, £605,000 by 3M Law Limited, £131,000 by The Legal Alliance Limited and £99,000 by Proddow Mackay (Conveyancing) Limited. There is no suggestion of any impropriety. 

There is no doubt, however, that clients have been left in the lurch. More than 400 people have joined a Facebook group to share their experiences and suggest solutions.

Lindsey Gaimster, president of the Sheffield & District Law Society, said it was ‘deeply concerned’ by the closure of PM Law and was monitoring the situation closely. She added: ‘In the meantime, we have been heartened to see the Sheffield legal community come together to offer comfort and support to those who have suddenly and unexpectedly lost their roles. We commend the professionalism and solidarity shown during what is clearly a difficult time for many.’