Further details have emerged of a trail of intra-group loans between members of the PM Law Group that collectively run to millions of pounds.
The annual financial statement of Proddow Mackay Solicitors LLP, covering the year ended October 2024, reveals more than a dozen outstanding interest-free loans between different entities operating under the same umbrella.
The group closed suddenly this week with no warning to staff or clients, and its collapse will lead to more questions about accumulator firms growing quickly through acquisitions and the Solicitor Regulation Authority’s ability to regulate them.
According to the Proddow Mackay Solicitors LLP'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 Solicitors LLP 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 with the loans.
The accounts also reveal that a bank loan with Clydesdale Bank in the name of PM Law Limited was received into – and loan instalments repaid by – Proddow Mackay Solicitors LLP.
Proddow Mackay Solicitors LLP was part of a VAT group in which all members are jointly and severally liable for amounts owed to HM Revenue & Customs, which as of October 2024 totalled £1.4m.
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 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 to and through our broad reach have devised models to try and help those firms by reducing their regulatory burden whilst 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.
As of Wednesday afternoon, the SRA had yet to make any statement beyond saying that it has received calls suggesting the firm had ‘not closed in the manner we would expect’ and that partners were being contacted to find out what was happening.
As recently as December, the regulator said it was looking at whether to improve its oversight of accumulator firms that had significantly changed their profile. The SRA noted there ‘appeared to be a link between rushed/opportunistic approaches, where minimal due diligence was undertaken’, which in extreme examples contributed to the ultimate failure of the firm.
It added that firms looking to grow by acquiring other firms could be a feature of a 'vibrant and competitive market', and it was important that regulation provide a ‘conducive environment for growth, free from unnecessary burdens for firms and barriers to normal market activity’. The SRA also said it needed to understand what firms are doing in practice and the issues that may result in failures which cause harm to consumers and the wider regulatory objectives.
