"We've got reports of a morph, and it's a bad one."
The SRA has intervened in four Metamorph firms, resulting in the closure of over a dozen of the troubled legal network’s brands.
The interventions in MLL Limited, BPL Limited, Beaumont ABS Ltd and Attray Ltd means all of Terry Jones Solicitors, Linder Myers Solicitors, Donnelley & Elliot Solicitors, SLC Solicitors, Verisona Law, Beaumont Solicitors, RJW Legal and their associated conveyancing brands have been shut with immediate effect.
Metamorph owns five other firms which are not subject to an intervention: Parrot & Coales, Knight Polson, Browns Solicitors, Beeston Edwards, and Knowles Benning, to which many of the assets were being transferred.
A Metamorph employer told RollOnFriday, “it was horrific to experience as a member of staff, however they were extremely helpful, understanding and direct. It was the first time in a long time that I felt supported. They took all of the post completion cases and any cases where we hadn’t received direct consent to the transfer to Knowles Benning. Honestly it was a huge weight off our shoulders as we knew things needed doing on them, but hadn’t been able to due to the consent issue”.
RollOnFriday predicted last week that the regulator was about to step in, as staff described chaotic scenes including delayed transactions, inaccessible office accounts, no HR or IT support, locked offices, sobbing case handlers, and furious clients. Emails showed lawyers begging management to make them redundant.
When ROF approached the SRA at the start of December to convey Metamorph employees’ incredulity that it had not yet intervened, a spokesperson said, "All firms have an obligation to close in an orderly way as laid out in our guidance. If we become aware that a firm is not adhering to our rules, then we can step in".
After taking action this week, the SRA said in a statement that the interventions were "necessary to protect the interest of clients and former clients of those firms".
The interventions mean the SRA has taken possession of all documents and money held by the closed firms, and an SRA-appointed agent will "deal with all matters currently held by these firms".
The SRA said it "will now investigate further the issues raised that have led to this intervention to see if any additional action is necessary. At this stage of the SRA's work, no further details can be disclosed".
Don’t worry, ROF has other means. A Metamorph insider told us on Thursday, “We thought the hardest part was over, however today we were disconnected from our systems. Around 30 minutes later we received confirmation that our system/network provider hadn’t been paid and had in fact disconnected us. The SRA were notified immediately and it is suspected they will intervene against the remaining brands immediately”.
The first sign all was not well at Metamorph came in September when employees told ROF they were not getting paid on time. Before long creditors were circulating, including HMRC, which presented its winding up petition against MLL Limited on 4 November.
To the surprise of an insolvency expert who spoke to ROF, Metamorph, led by outgoing CEO and founder Tony Stockdale, began to move client files from MLL to Knowles Benning, in anticipation of the court allowing it to appoint its own administrator.
But instead the judge ordered the compulsory liquidation of MLL on 30 November, dooming the latest plan by Metamorph management to take control of the catastrophe. In an all-staff email sent last Friday, employees were informed that as a result of the compulsory liquidation, "HSBC froze out client accounts" and at the same time the banks "also chose to freeze the client accounts of BPL Solicitors and Beaumont ABS Limited", both of which had already been placed into a Creditors Voluntary Liquidation.
Staff were told this was why they had still not been paid, due to some "technical issues". But fear not, said management, because "once the client accounts are released to Knowles Benning then after accumulated client to office transfers are completed (please everyone ensure your billing is completely up to date) salaries will be paid by KB". They were told there was "also over £150,000 in the MLL office account, the first priority of which, after liquidators fees, is outstanding amounts for pensions and salaries".
Unfortunately for the Metamorph Board, all of those client accounts and monies have now been seized by the SRA as part of its intervention, so it’s back to square one. It was the latest confident prediction from bosses to wither within hours. Although their announcement to staff that the company's offices in Sale, Chester and Shrewsbury will close probably is accurate.
Metamorph did not respond to a request for comment.
UPDATE: On 19 December, the SRA also intervened in Knowles Benning and Knight Polson, resulting in the immediate closure of those firms.
Comments
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If an overworked paralegal working in a toxic environment leaves a file on a train and then gives a panicked untruth to cover it up, which she later retracts and apologises for, but with no real harm done, and where there is evidence of some troubles that led to the failure, here come the SRA, all guns blazing and dozens of staff all fighting to be the one to get her struck off.
Compare and contrast to what they do here. If ROF had not published an article, no one would still not even heard from them yet.
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Is it solicitor Simon Goldhill or accountant Tony Stockdale behind this mess?
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Salaries out of client account? That’s an interesting idea.
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Not only was our IT plugged without notice - and we staff do not blame CTS for doing so - there has been absolutely no communication from any board or senior management since. Email is still working, and staff are sending them emails, and they're not bouncing. So they're totally ignoring us.
And we're still not paid, obviously.
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The SRA are only taking MLL files everyone who transferred to KB is being ignored just like the staff.
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I resigned Mid -November 22 and got written authorities from my Clients' to take their files with me to my new Firm. Most of my Clients' have not been able to get the money that was held on account back, and this was even before the accounts got frozen.
Knowles Benning wrote to all of my Clients' telling them that they should sign over to them, insinuating that I would still be the fee-earner dealing with their matter, which was a complete fabrication to intentionally mislead the clients.
In respect of another matter, £34k in realised share funds, which are due to be paid to a beneficiary, that were paid into MLL accounts have just disappeared without a trace, and the current HR staff and those that are left in admin can't find the funds, so no wonder they are suggesting that they can pay staff from the Client Account. It is a complete madness.
We are all lawyers for Gods sake, clearly Tony Stockdale and the other directors cannot hide behind the corporate veil, as they are certainly in breach of both their Directors' Duties and their fiduciary duties insofar as non payment of our wages and pensions are concerned?
Anyone up for a class action?
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Imagine a remake of the Christmas classic Die Hard, where John McLane (Bruce Willis) rolls out the red carpet to Hans Gruber and his gang, welcoming them into Nakatomi Plaza and praising their forward-thinking alternative business structure as a much needed boost for the American financial industry.
In the 60 minutes that follow, McLane hides upstairs and watches impassively as the gunshots ring out, the FBI surround the building and underground vaults are hacked open.
In a tense exchange via walkie-talkie, McLane finally confronts Gruber and demands to know if clients and employees are being protected. ‘Definitely’ replies Gruber, ‘It’s all absolutely fine. We’re just rebranding the Nakatomi Corporation to ensure clients, creditors and staff receive the best possible service’. Satisfied, McLane has a little nap under a table.
Half an hour later, with the building reduced to a pile of smoking rubble and Gruber’s gang escaping with the loot via helicopter, McLane emerges and announcing he’s intervening ‘to ensure an orderly closure’ of the Nakatomi empire.
That’s the SRA, that is.
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Aside from the awful situation for the staff, I think there needs to be a re-think from the SRA about the business models they are authorising. There are lots of businesses now set up in similar terms to this one - 4 or 5 different LLPs or limited companies with shared owners and directors which make it impossible at times to work out which assets are held by which company. Data and assets can be moved between different companies so that those instructing them or trading with them have no idea whether the business can pay its way or where and how its assets are held. There are also suggestions in these articles that assets have been transferred to one company whilst leaving the debts behind in the insolvent company which isn’t a great look.
It may well be perfectly legal to have one company holding all of the assets and another one holding all of the liabilities, but surely such arrangements must damage the public’s perception of lawyers, which is the SRA’s usual concern when investigating people’s private lives. Is it too much to ask for the SRA to tighten its rules to stop these structures for the benefit of clients and employees alike?
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22 hours since we lost access to the systems, and 46 hours since any email from any member of the board to staff. Tick Tock.
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Are you reading the comments SRA? The one at 12.17 is my particular favourite. Your regulation of ABS is woeful because you are invested in them being a success.Those of us that you have wheeled out because you view us as susceptible and vulnerable know the truth. Target us to make it look like you are an effective regulator! Good luck in sorting out this mess and the compliments of the season.
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I've made sure to let the liquidators know all the dirt. I suggest that others do so. Not out of spite, but to help stop this sad situation happening again.
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I am the last man standing at RJW LEGAL and I’ve not been told we have been shut down. To be honest I’ve not been told anything and all my colleagues in our various firms are in the Dark. We have not been paid for November, will probably not been paid for December. I have no idea about pension contributions. Our systems were cut off at 3pm yesterday so we can’t access client files. I would be delighted to be made redundant at this point
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This whole episode here does raise serious issues about the post Legal Services Act legal 'profession' and the competence of the SRA to act as its gatekeeper. From the reports, it seems the action by the SRA was so delayed here that by the time the metaphorical cavalry arrived the metaphorical garrison had already been slaughtered. It remains to be seen how many clients have suffered as a result, not to mention the poor staff, some of whom it is reported haven't been paid since October. Although seemingly still much needed, the intervention seems to have been deliberately delayed and only carried out once as many as possible of the live fee generating files have gone to the new entity KB. The dross is now disposed of at the profession's expense as the existing entities are insolvent so no recovery of the probably still significant intervention costs will be possible from them.
It seriously beggars belief for me that the regulator has stood idly by for so long while the position deteriorated. I note as well that any lay person or corporate entity needs prior approval from the SRA under the SRA Assessment of Character and Suitability Rules as being fit and proper for the role. The SRA's own website says one of the things that will be taken into account in deciding if a person is suitable is whether the person is a director of an insolvent company and Rule 13.9 allows the SRA to withdraw approval immediately at any stage when someone isn't considered fit for the role any longer. If the SRA really has been complicit in delaying an intervention to facilitate funds and files being transferred, were they really happy that the transfer they were facilitating was to be to a new entity where the same owners responsible for the staggering debt being walked away, remained as SRA fully approved owners and managers? The SRA's apparent complicity in this arrangement, if complicit they were, raises serious questions of fundamental importance. Could anyone wake up the SRA spokesman who has made the previously reported vacuous comments and demand some proper answers please? Better still, should there not be a full MOJ inquiry carried out into this to establish the full facts? .
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I checked their LinkedIn profiles:
Solicitor Simon Goldhill is an Oxford graduate. That is probably why SRA went all softly, softly on them.
Accountant Tony Stockdale only mentions Retford Grammar as his education. That's ... interesting.
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I wish to comment as an ex employee I had a meeting with this company when it was decided that they were taking over the company I worked for and I honestly didn’t trust them from that meeting so immediately decided to look for another job and I just thank god I got out in time just sending lots of love to a few of my colleagues that are still there!! Hope you all get out soon and can’t believe you are having to go through all this just so upsetting to see a company that we worked so hard for, for so long go down hill in a matter of months thanks to metamorph!! 😢❤️ xx
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Email access now cut off completely. With nobody in the offices, and the board silent, there’s no way to find out what’s going on.
Knowles Benning in Dunstable is doing a brisk trade still, with IT and accounting functions running happily.
If the SRA don’t step in, they’re going to phoenix and this saga will repeat itself a few months of years down the line.
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SRA asleep at the wheel. Everyone was clamouring for them to take action long before they did.
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Let’s hope Stockdale is barred from starting anymore businesses!! This is the second time I know of that this has happened!!
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Response to message 17.18.
Knowles Benning Dunstable is not doing a brisk trade still. All fee earners have resigned and by next Fri 23rd there will only be 3 people left in the Dunstable office, none of them are fee earners...it is far from a happily running office, its reputation has been completely ruined in a matter of months.
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The question is WHY did all these firms let Metamorph have the opportunity to destroy them?
I’ve been looking at these Roll on Friday reports and have googled Metamorph and the clueless two running it and I’m intrigued to know why the management / decision makers of these once small firms felt that it was the right thing to do to pass the future of their firm into destructive hands!!
Was it money? Looking at the unfulfilled promises Stockdale has made to employees, most sounding too good to be true (which of course they were), I wonder if the decision makers of these original firms were led to believe they would be in the money £££
Not entirely sure they would have been acting in the best interest of their clients and employees at this point. Perhaps the SRA need to delve a little further and ask some more questions as to WHY these small firms allowed an accountant to take over?
It’s not making sense. WHY if solicitors are expected to be hot on Due Diligence for clients did they not carry out the simple task of Due Diligence on Tony Stockdale?? And IF they did, WHY was it ignored?
WHY WHY WHY????
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I see Tony’s been on here again with his downvote!
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It is worrying to hear already about the issues at KB Dunstable above. I understand from the reports to date that KB will now essentially be under the same ownership as the predecessor firms as they are all advertised as part of the Metamorph group. Notwithstanding any cosmetic temporary shuffling of directors that may have taken place, presumably the owners have nothing to fear from the risks in the same way KB possibly would if they remained under separate ownership. If the intention was to dump the debt in the now insolvent limited liability vehicles, presumably there will have been no express or implied assumption of liability by KB for any of the debts of the predecessor practices. But if the reports and comments to date are all accurate, I am wondering will it be this straightforward? I know a successor practice can still be held responsible if a creditor is able to establish the transaction amounted to a consolidation or merger, or if the new co is a mere continuation of the predecessor or if they can establish the transaction had been entered into fraudulently to escape liability for debts. I am sure the SRA has been overseeing every step of the process and presumably those involved have been seeking their own legal advice but if the previous reports are to be believed, is there any scope for argument on some of these points? I will be very interested to see in the weeks and months ahead if any unpaid staff or other unsatisfied creditors do pursue such arguments and seek to recover against KB or if they await the liquidators investigations before deciding. I would have thought anyway that there is a strong argument that KB now meets the criteria for a successor firm under rule 2.10 of the Legal Ombudsman's scheme rules. If so, I would have though KB, particularly if essentially under the same ownership, are still likely to be held responsible for acts or omissions resulting in an unreasonable service whether these occurred before, during or after the transition process. If so, and many client complaints have been generated by what we have been reading, what burden will this alone place on KB?
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Response to message 17.18
Unfortunately, Knowles Benning has no money either. It’s all gone. Staff won’t be paid for December.
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It’s been sad, if predictable, to see the uninformed comments and outright gloating on other legal forums (not Rollonfriday, I hasten to add) about how this is all down to ‘conveyancing factories’ and high referral fees paid to estate agents. As those same websites have now closed the comments option, I shall offer my retort here.
Metamorph was made up of 12 or so firms that Stockdale & Goldhill acquired. The vast majority of these (Terry Jones, Donnelly & Elliott, Parrott & Coales, Linder Myers etc) were relatively small, one or two office setups offering legal services including crime, family, wills and medical negligence legal representation to local clients. Each office had a small conveyancing department, with between one and four qualified solicitors acting as fee earners with support from admin staff.
The only firm in the group even vaguely resembling a ‘high volume conveyancing factory’ was Beaumont Legal, but in reality it was nothing of the sort. In 2021 that office had 20 or so qualified solicitors and licensed conveyancers acting as fee earners and management, with a further 6 fee earners on training contracts due to qualify in March 2023.
Do not let anyone tell you that this appalling mess is down to market factors, untrained/unqualified staff or referral fees. The fees owing to estate agents at liquidation represents a tiny proportion of the total debt that Metamorph mysteriously managed to accrue over the last couple of years (years that coincided, incidentally, with record breaking billing figures in conveyancing some months due to the SDLT holiday of 2020-2021).
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The Socialist Rifle Association are playing target practice with all the paperwork. But a Tiny target remains at large.
Goldhill had a great fall and the various bureaucratic organisations cannot put them back together again.
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I hope Tony and Simon have the most wonderful Christmas ever, the ones where they don’t have to tell there children that they won’t be getting the presents that they wanted. That they will get turkey on their Christmas dinner other than a substitute cause of lack of money like most of their current and left staff
how do they sleep at night, oh that’s right in there big houses with heating unlike lots of their ex employees or even current employees
They all disgust me in the way they treat people. Good thing I believe in Kama. Hope you both sleep well cause no one else that was employed with you, and owed money too, does not
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Knowles Bennett also now being shut down....
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Knowles Benning has been closed today and everything frozen!! These guys don’t have a pot to piss in, I’m sure they are living it up in their mansions having a lovely Christmas 🤬
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Knowles Benning offices now all been shut down hope you are so proud of yourselves metamorph for destroying everything they have worked for, their staff and their reputation for so many years and leaving staff unpaid hope you get what’s coming to you but trouble is people like you never do makes me so cross!!
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First it was Tenon in the accountancy sector and then Metamorph in the legal sector. Surveyors beware, if Tony “I turn it to shit” comes knocking, you know what to do.
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Knight Polson closed down today
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Staff at KB are absolutely devastated just like everyone else. Just as at other firms most staff have been working there for many many years. Feel completely let down. Simon Goldhill even had the barefaced cheek a few weeks ago to bullshit his way through a meeting. He and Tony are liars to the end. Karma is too good for people like them!
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Anon***, what was Simon Goldhill’s explanation? Tony has issued a few statements and his emails have been leaked. What has Goldhill actually said?
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What has happened to Knowles Benning is devastating and also a lesson to all. How can liars, cheats and shysters like those behind Metamorph be allowed to get away with doing things like this? Serious questions have to be asked of a system which allows this to happen. These people have destroyed the livelihoods of so many let alone the reputation of a well-respected businesses which had standing and respect.
When Metmorph acquired Knowles Benning in July it must have already been aware it had serious liquidity problems. Tony Stockdale made all sorts of promises etc to staff when he met them soon after the takeover. The man was a fantasist. The obvious question is where has all the money gone?
Please have some sympathy for the real staff at Knowles Benning who found themselves at the centre of a problem they did not create and worked very hard to cope with it. Also for all those others who have and are suffering as a result of the lunatic actvities of those behind Metamorph and the failure of a system which does not provide for proper control and regulation.
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I feel very sorry for the people there.
Tony will be back, though.
Remember - when Tony comes knockin, the door needs lockin.
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Liquidators need to know … Crime Department Telford… lots of client files just sitting in the drawers and boxes on the floor. Clients do not have a clue. Someone needs to go there and sort the files out … urgently.
oh and Happy Christmas Stockdale (you [redacted] man) and Goldhill ([redacted]) may Father Christmas bring you all the shit and karma you deserve
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Love to you all from message sent at 10.35 on 20th dec I’m sure I worked with you!! 😘
my comment on 19th metamorph obviously have 28 staff working for them still!!
hope they rot in hell for what they have done to our company and our staff makes me so cross totally destroyed us in a few months 😡😡 love to everyone at KB have a lovely Xmas if you can!! xxx
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The auditor has quit now and the reasons given should cause Tony and Simon to be very worried. Thank goodness that the rules were relaxed so that people like Tony could become law firm owners. The SRA, relentless in pursuing junior solicitors with limited ability to fight back, has sat idle for months before being shamed into action. It’s all too little, too late.
I look forward to the SRA investigation and what follows.
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@Best not tell em Pike 21 December 22 14:39
The SRA team were in the office last week packing up all the MLL files. They’re there this week doing the KB files. It’ll all be in boxes and with Gordons ASAP.