The latest chapter in the Ince saga, Hybrid working debate continues, Napthens shock departures, and more

Who’d be an Ince employee?

You’ve got to feel sorry for all the decent, hard-working people at stricken City firm Ince who have managed to keep it a going concern despite its many, well-documented woes in recent months. Just in case you missed the story, the facts are these: after Ince failed several times to publish its accounts, a major creditor of this once-esteemed, LSE-listed company pulled out and the Ince Group collapsed back in late April of this year. The only bit of good news to follow was that London and Birmingham-based law firm AxiomDWFM was willing to step in and rescue the firm, thus keeping 700 of Ince’s people in work.

Fast-forward four months, and I can imagine the collective cry of exasperation of these employees as the rebranded Axiom Ince once again makes the headlines for all the wrong reasons: the firm has been forced to announce that it is “not accepting new instructions” and “may be unable to continue in its current format” after three of its partners were suspended by the Solicitors Regulation Authority (SRA) earlier this month.

And why were these three gentlemen – Pragnesh Modhwadia, managing partner; Shyam Mistry, head of personal injury and medical negligence; and Idnan Liaqat, head of commercial, investment and residential property – suspended by the regulator? For failing to comply with accounting rules. Plus ?a change.

In the humiliating statement Axiom Ince felt compelled to put out, it also announced that Modhwadia is alleged to have misappropriated “very significant sums of money”. The three partners are now prohibited from practising as solicitors while a “thorough and comprehensive investigation and review” is conducted by accounting firm BDO.?

Axiom Ince was quick to stress that the SRA has not prevented it from trading and was not intervening in the firm itself. However, it did concede that the current situation will have a massive impact on its ability to operate:

“We will continue to meet our regulatory and moral duty to act in our clients’ best interests. Therefore, moving forward we will not accept any new instructions. Whilst we will continue to trade as normal in the immediate period, the firm will likely be unable to continue in its current format. This may mean that parts of the firm and teams within the firm may be transferred to different practices to provide continuity of service to clients.”

A break-up therefore seems more than likely – cue yet more anxiety for those 700 employees as the turmoil continues. My heart goes out to them, and I hope they all find a safe berth if the worst comes to the worst and this venerable, 150-year-old shipping firm founders completely.

Harbour coughs up the cash again

National firm Slater and Gordon (S&G) has pinged on my radar twice this week. The first time was when I read that the firm is representing two of the families whose babies fell victim to serial-killer nurse Lucy Letby. The second time, it was the news that S&G has just secured ￡33m in funding from leading litigation funder Harbour.

This marks the third time that we’ve mentioned Harbour in this newsletter in recent weeks, after it provided credit facilities to Bamboo Group and to Rothley Law: it’s yet more evidence of the way the company is diversifying its offering to law firms by moving away from ‘mere’ litigation funding to providing lines of credit that successful applicants are then free to invest in different areas of their business. It’s the kind of flexibility that heads of multi-strategy law firms could previously only dream of, pretty much giving them carte blanche to spend the money as they see fit.

What makes this story slightly different to our other recent coverage of deals funded by Harbour is that, in this instance, the money seems to be needed by a law firm not only for the pursuit of a growth strategy, but also in order to shore up the business: it appears as if S&G may well need this cash injection just to stay afloat (I’m sure there’s a maritime-based pun in there somewhere about harbours and anchorages).

How do we know this? Because S&G’s auditor, Deloitte, stated in its most recent assessment of the firm that S&G’s revenue issues and its then-ongoing search for creditors signified that a “material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern”.?

Those are hardly reassuring words, despite the positive spin from S&G’s chief operating officer Elizabeth Comley about “big growth ambitions” for the firm’s personal injury, clinical negligence, and other practice areas. It makes one wonder just what the terms were under which Harbour was willing to invest such a princely sum. In any case, I hope S&G now manages to get itself unstuck and into deeper, calmer waters.

Napthens left rudderless after shock departures

There’s something afoot at North West firm Napthens: it has lost not one but three executives in the space of a week, with the sudden and seemingly unplanned departures of CEO Alex Hatchman, director of strategy Ben Sears and operations director Gillian Carlisle-Collett. All three had previously worked together at Fletchers, which Hatchman also used to head up and from whence Sears and Carlisle-Collett followed her when she made the move to Napthens.

Napthens seems to be struggling to react to these unexpected events – at the time of writing, all three departed team members are still profiled on the company website, despite them apparently having left a week ago. It has at least put in place an interim executive committee, which “will ensure the firm continues to run as usual, with further announcements made in due course”. When approached for comment by The Lawyer, Napthens also stated that “the firm is grateful to Alex for her hard work and dedication to Napthens, and wishes her well in her next role.” What else could they say, right?

It’s all quite strange. As recently as last month, the departed CEO – who only took up her post 18 months ago – was talking a good game about her plans for “transforming the business” in a wide-ranging interview posted online. However, she did also drop hints about encountering “points of resistance from the old guard” in her efforts to reform the culture of companies, though it isn’t clear whether she is referring specifically to her experiences at Napthens.?

Is this what tipped her over the edge and made her depart for pastures new, together with her two loyal colleagues? We’ll probably never know, but one thing’s for sure: this is not a good look for Napthens. For if (with apologies to Oscar Wilde) to lose one member of the C-suite may be regarded as a misfortune and losing two looks like carelessness, then what, pray, shall one say of a law firm that manages to lose three in one fell swoop??

A farewell to hybrid working?

Despite its huge popularity among many employees, some firms are beginning to push back against the near-ubiquity of hybrid working by requiring their people to come to the office either full-time or at least four days a week. It’s a risky strategy at a time when talent remains in short supply and employees have grown accustomed to taking flexible working for granted in the wake of the pandemic.

According to The Lawyer , the charge to get staff back into the office is being led by Newcastle-based claims and compensation specialist Winn Solicitors, which required its people to work in-office five days a week as soon as COVID-19 restrictions were lifted in spring 2021.?

CEO Chris Birkett told The Lawyer that productivity skyrocketed after the return to full-time office work and that the firm’s predominantly young team “actually love the fact that we are all in the office”. However, he did also admit that the firm lost some senior lawyers when it stopped offering hybrid working.

Other firms encouraging their staff back into the office full-time include Knights and the boutique litigator Signature Litigation, whose return to full-time in-office working coincided with double-digit growth in turnover. Mere coincidence? The jury is out.

And is likely to remain so for a long old time to come. I can think of few issues relating to working practices more divisive than the topic of flexible or hybrid working. Parents and care-givers in particular have benefitted massively from being able to fit their work commitments around family life, and few people miss the grind of their daily commute. However, others are staunchly of the opinion that something vital has been lost by not being in the office full-time: camaraderie, a shared sense of purpose and the ability to directly mentor, learn and exchange ideas with colleagues.

It comes down to a fine balancing act that employers will hopefully get better at as time goes on. Many firms know they risk losing too many talented staff if they were to mandate a full-time return to the office, and have settled for a compromise of either four days in-house (these firms include Morgan Lewis, Jones Day and Latham & Watkins) or a three-day-in, two-day-home split (including Herbert Smith Freehills, Covington & Burling, Walker Morris and Fieldfisher).?

Some employees will be satisfied by this, feeling it provides them with the best of both worlds. Others will consider a kind of judgement of Solomon. I guess you can’t please all of the people, all of the time. But we certainly haven’t heard the last of this topic, which promises to remain a hot one for many months and years to come.

Steady Eddy Russell-Cooke takes it up a notch or three

West London firm Russell-Cooke is known in the legal world for its steady approach to growth. In the five years from 2017/2018 to 2021/2023, the firm’s revenue increased at a gentle pace of 2.3% per annum on average, growing from ￡34.9m to ￡39m, a total of ￡4.1m.

However, the firm’s lawyers seem to have found and then strapped on some rocket boosters over the past year: Russell-Cooke has achieved more growth in the last 12 months than it did in the preceding five years! In 2022/23, the firm’s revenue blew up by ￡7.4m, going from ￡39m to ￡46.4m and exceeding the market’s wildest expectations. And not only that: net profit has also increased from ￡13m to ￡17m, a growth rate of 30.8% and presumably a nice resultant boost to PEP.

Nice work if you can get it, and Russell-Cooke’s lawyers certainly have: these surprising results are the product of organic growth in the amount of business coming through the door, rather than stemming from any acquisitions or major increases in headcount – indeed, the firm took on only two new partners and 13 other lawyers last year.

And Russell-Cooke’s head honchos are now predicting that these stellar results won’t be a one-off, with a forecast growth of 7.8% or ￡3.6m, which would take revenue up to the ￡50m mark. Sometimes, slow and steady really does win the race.

In other news

Irwin Mitchell in mourning after death of CEO

Andrew Tucker, CEO of Irwin Mitchell, died on 16 August after a sudden illness, the firm announced on Monday. Tucker had been with Irwin Mitchell for nearly 40 years and served as CEO since 2014.

Glyn Barker, Chair of the Irwin Mitchell Group, stated that “his legacy is a robust business with a strong culture and widely admired reputation. As well as being a hugely respected leader, Andrew was a much-loved colleague, always with the best interests of colleagues and clients at the forefront of his thinking, and we will miss him hugely.”

A valuable resource for free legal advice in North Yorkshire

North Yorkshire’s first legal centre has already helped over 700 people since it opened its doors a few months ago. The North Yorkshire Citizens Advice and Law Centre was set up by Citizens Advice to provide face-to-face legal support for North Yorkshire’s predominantly rural communities. Its team comprises three housing specialists, two people in the immigration and asylum team, a discrimination specialist and a family specialist. For more on this story, read here .?

More examiners needed

The Solicitors Regulation Authority (SRA) has issued a call for more solicitors to join its pool of? examiners to help assess future cohorts of aspiring lawyers. According to information provided to the Law Society Gazette, potential examiners can expect a day rate of ￡400 or more for training and assessments, which take place over a three-day period. To find out more, read this article in The Gazette.

Dates for your diary

• 31 August – Jones Day Open Evening – An evening of interactive Q&A and networking at the Jones Day London office. Meet trainees, associates and partners and have your questions answered. Learn about the type of work of the firm, its global presence and strengths in London – including Jones Day’s distinctive non-rotational training system. Network with the firm’s lawyers and graduate recruitment team over refreshments. Open to all – any degree discipline and year of study. In-person event at 21 Tudor Street, London.
• 31 August – East London Legal Networking – Putting a face to a name can be terrifying, or it can be a really pleasant evening! Enjoy a friendly and relaxed networking session with fellow legal professionals in East London, get to know colleagues and collaborators as well as competitors. S hare tips, tricks and knowhow not only about business but about living as a lawyer and the particulars of being a legal professional, or someone who serves the sector, in East London. In-person event at Forest Gate Tavern, London.
• 7 and 8 September – Reuters Events: Legal Leaders Europe 2023 – This event will unite 200+ General Counsel and Heads of Legal Operations to make the transition from company lawyers to strategic business advisers. Crafting a winning partnership between Legal Ops and the GC, driving ESG priorities forward, and embedding legal across the enterprise to deliver strategic value are the essential ways Reuters Events is helping in-house counsel elevate legal beyond law.

I hope you've enjoyed this week's edition.

Thanks,

Si Marshall

[email protected]