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The cost of intervention…

The cost of intervention…

Following on from our commentary on SF and Blakemores (etc.) demise, we note that the Law Society Gazette reports that the SRA has spent 10% of its entire annual budget intervening in failed firms in 2013 (with Atteys also proving costly).  What is more worrying is that the SRA is expecting to intervene in around 30 firms this year.  The regulator also found cases where partners were continuing to receive payments irrespective of their firm’s financial situation and others where senior partners were hiding the true financial picture from ‘rank and file’ partners. Other firms had even used VAT received to pay off short-term tax bills.  (I should add that there is no suggestion of impropriety in regard to Atteys or Blakemores.)  The fact it seems that relatively large firms are under intensive supervision is a real worry.  But why are the costs spiralling so quickly?  And is the ABS revolution encouraging risk taking?  And isn’t the SRA’s principal job to protect clients rather than acting as proxy-administrators?

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