Imminent action by creditors forced regulators to intervene in West Midlands law firm Blakemores with the loss of around 250 jobs.

The full scale of the impact of one of the biggest collapses of a regional law firm in living memory emerged as criticism of the Solicitors’ Regulation Authority (SRA) continued.

In an interview with the Birmingham Post, Helen Herniman, director of Post-Enforcement with the SRA revealed the regulators had been in discussions with Blakemores for several months amid concerns over finances.

The 53-year-old law firm was closed by the SRA and around 250 employees in Birmingham and Leamington Spa sent home in the immediate aftermath of the SRA’s intervention.

Ms Herniman told the Post: “It is not a secret that there was some financial instability (at Blakemores). We do not take the decision lightly to intervene in any firm. There are many options before we take the decision to intervene.

“My colleagues have been engaging with Blakemores for several months; we were very well aware of the circumstances – it was not a knee-jerk reaction to intervene.

“We would always prefer an orderly wind-down but you have to consider what options they have got. An orderly wind-down was not possible given the action that was going to be taken by creditors.

“When we intervene in a firm the agents will identify the urgency of the files. There are about 5,000 live files and over 130,000 archive files. Our focus is on urgent matters and then the live files, and then we move on to deal with the 130,000 archive files – that will take quite a bit of time. We have got to write to 5,000 live clients.”

In an interview with the Law Society Gazette last week, managing partner Guy Barnett said the SRA’s action was likely to cost the legal profession up to £3 million.

He was quoted as saying: “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.

“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.”

But Ms Herniman disputed Mr Barnett’s estimation of the cost of the intervention. “At the moment, initial estimates are that it is not going to be £3 million. Our earliest estimate is that it is about £800,000 to £1 million.

“The bulk of the work should be completed within a few weeks – sometimes it takes longer, depending on the issues.

“Many of the staff have been very understanding and very co-operative with us.”

But a source said there was still anger over the fate of Blakemores. “The SRA could have come in and monitored things while they ran the firm down. Instead, they have come in and destroyed all these jobs. I still say that what they have done to Blakemores is disgraceful.”

The source said many employees were still sitting at home with no jobs. “There will be a lot of people on the dole. We are talking about 150 people with Lawyers2you alone.”

Law Society president Lucy Scott-Moncrieff said: “This and recent similar cases dramatically illustrate the pressures on so many parts of the profession – the obvious pressures on Personal Injury and legal aid practitioners are to the forefront.”



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