All 250 solicitors and employees of Midlands firm Blakemores, owner of the consumer brand Lawyers2you, were today told to clear their desks and go home after an intervention by the Solicitors Regulation Authority.
The innovative and fast-growing firm appears to be the latest casualty of a crisis in the personal injury sector. One analyst blamed cashflow problems against the ‘toxic combination’ of legal aid cuts and the shrinking of the PI market.
The SRA said it intervened ‘in order to protect the interests of clients (or former or potential clients), or the interests of the beneficiaries of any trust of which Blakemores Solicitors LDP or any of the partners of Blakemores Solicitors LDP is or was a trustee’. Practising certificates have not been suspended.
Blakemores was founded in 1961 by Roger Blakemore to specialise in property conveyancing. In 2002 managing partner Guy Barnett (pictured) led the firm through a major expansion, which included setting up Lawyers2you stands at more than 20 public-facing sites including airports and shopping centres.
In 2010, Blakemores was awarded the title 'Most Innovative Marketing Idea 2010' by consultancy 360 Legal Group for launching Lawyers2you, one of the UK's first direct consumer legal marketing brands.
Callers to Blakemores today heard just two ringtones before a voicemail prompt invited them to leave a message. An insider told the Gazette that employees were summoned to a meeting mid-morning today, told to get their possessions from their desks and go home.
Staff who asked about redundancy payments were told they would need to claim anything they were owed from the government.
The Gazette understands that the firm’s civil litigation team, comprising three partners and 15-20 other staff, were taken on by Midlands firm Shakespeares some weeks ago.
Attempts to contact the firm’s managing partner were unsuccessful, as were attempts to talk to the interim manager handling the administration process.
Viv Williams, chief executive of legal consultancy firm 360 Legal Group, who praised the Lawyers2You model in September 2011, said legal aid cuts and the shrinking of the PI market had proven a toxic combination at a time when the business was growing so quickly.
‘Ultimately it’s a business of cash. The theory was absolutely right but you need deep pockets to make it work,’ said Williams.
‘It doesn’t matter whatever industry you’re in – if you overstretch and over-expand you’re going to struggle.
‘They were very positive but it probably needed to be run under an alternative business structures with funds from different people. I suspect we’re just scratching the surface and this is going to continue if law firms continue not to be run as businesses.’
The SRA has appointed an agent, Neal Boland of Stephensons Solicitors LLP, to deal with all matters currently held by Blakemores. The agent will assess all ongoing matters and deal with those of greatest need first. The SRA's archive team will take control of all documents held by the firm.
It is understood Blakemores is one of the biggest firms to require SRA intervention in terms of client account amounts, live and archived files and number of staff, although Wolstenholmes of Cheadle and Birmingham, which was closed down in January 2010, remains the largest.
Manchester personal injury firm Calibre Solicitors, trading as Legal Gateway, also went into administration last month.
Legal analysts also predict a number of personal injury firms will struggle to survive the government's impending sector reforms, due to come into force next month.
Law Society president Lucy Scott-Moncrieff said: 'We are saddened to hear of the failure of Blakemores. We are already working with Birmingham Law Society to support solicitors and trainees at Blakemores. We plan to make more details available in the next 24 hours.
'We will also seek to assist the Legal Services Commission and the SRA to help orchestrate the orderly transfer of client cases to other law firms.
'This and recent similar cases dramatically illustrate the pressures on so many parts of the profession – the obvious pressures on PI and legal aid practitioners are to the forefront.
'The Law Society will later this week announce a source of information and guidance that solicitors and trainees worried about the viability of their firms will be able to refer to for help and advice.'
Information and guidance for solicitors and trainees worried about the viability of their firms is available at the Law Society's website