Regulators have been accused of “destroying” long-established Midland law firm Blakemores and throwing around 250 employees out of work with “farcical” haste.
Sources at the cash-stricken firm attacked the Solicitors Regulation Authority (SRA) over its closure of the 53-year-old business and the loss of jobs at its offices in Birmingham and Leamington Spa.
And managing partner Guy Barnett has revealed that the demise of Blakemores was likely to cost the legal profession up to £3 million after 7,500 live files were removed.
The SRA has said it had intervened to ‘protect the interests of clients or the interests of the beneficiaries of any trust of which Blakemores Solicitors or any of the partners of Blakemores Solicitors is or was a trustee.’
Mr Barnett said that £2 million to £3 million was what he estimated the cost to be of removing 7,500 live files from the firm’s offices, taking them to a storage facility, entering them on a database, writing to each client before going on to locate a new solicitor for them.
But Mr Barnett told the Law Society Gazette there had never been any question of ‘impropriety.’
“Practising certificates have not been suspended.
“The intervention arose from the cumulative effect of the recession, such as the unhelpful attitude of the banks and legal aid changes, all combining to break the camel’s back.
“The SRA couldn’t have found a worse time to intervene.
“These clients have until April 1 to find a conditional fee agreement, after-the-event insurance cover and a new solicitor before the next round of legal aid changes comes into effect.”
Mr Barnett said a similar number of asylum cases under legal aid certificates would also be without representation.
“Who is going to reach all these clients and what will they do when they arrive at court and find their solicitor is not there?”
The intervention caused the freezing of the firm’s bank accounts on Monday, preventing staff from being paid, as previously arranged with the banks.
A source said: “The Solicitors Regulation Authority has come in and destroyed the business – they have killed the firm. They said there was no impropriety or dishonesty and they came in and got rid of everybody. The whole thing was a farce; it’s very difficult for staff to understand.
“There were financial problems and, under the present rules, the SRA have to see the accounts and determine if a firm is viable. We were under the impression that we were going to get a period of a week or two weeks to close it down constructively so that clients’ money could go to other firms, with their permission.
“But we could have been viable if we had been allowed a bit more time. The partners were working on it and things were beginning to work slowly though. I cannot understand why they didn’t apply a disciplined rundown – it’s a mess.”
A statement from the Solicitors Regulation Authority confirmed it had intervened into the practice at Blakemores Solicitors.
It adds: “The practising certificate of Guy Barnett, Matthew Montanaro, James Paul Howard, Constantina Nicolaou, Mellonie Elaine Ward, Joanne Warren and Kellie Angie Maguire have not been suspended.
“It was necessary to intervene 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 or any of the partners of Blakemores Solicitors LDP is or was a trustee.
“An intervention means the SRA has closed a firm with immediate effect. We will stop the firm from operating, take possession of all documents and papers held by the firm (including clients’ papers), and take possession of all money held by the firm (including clients’ money).”
The SRA has appointed an agent, Neal Boland of Stephensons Solicitors, to deal with all matters currently held by Blakemores.