There may be trouble ahead.
Metamorph Group, which owns and operates over a dozen law firms, has failed to pay its staff on time for two months in a row, and its CEO has been replaced, RollOnFriday can reveal.
The company launched in 2016 and over the last six years it has acquired 15 firms including north-west-based Linder Myers, property firm SLC Solicitors, volume conveyancers BPL Solicitors and Beaumont Legal, Aylsebury-based Parrott & Coales, Hampshire-based Knight Polson, and Quality Solicitors. The business currently employs approximately 650 people.
Metamorph's accounts for 2021 are three months overdue, but the last available financial snapshot showed that in 2020 the firm made a loss of £2.1m, and had debts of almost £11.6m falling due within one year.
However, its financial situation appears to have worsened since then and sources have told RollOnFriday that the firm was unable to pay its staff on time in July and August.
Tony Stockdale, Metamorph's CEO, emailed staff on 5 August after an emergency board meeting was held to address the late payroll in July.
Stockdale wrote that the meeting took longer then usual in order to make sure "everyone on the board fully understood how much the business has been rocked by the events of the last week".
"I can't 'undo the past' - no one can. What happened is my fault and I can't change that", said Stockdale in his extraordinary mea culpa to staff.
"Whilst the last thing I want is to leave the business I have offered to resign, but the Board do not think that is in the business' best interest, given a number of factors including my relationship with key stakeholders", he said.
Stockdale revealed that shareholders in the business were being tapped to contribute a "very significant capital sum" in August which "will give us a meaningful cash buffer to ensure that the circumstances of the last few days never happen again". He said "a number" of key shareholders had already agreed to contribute.
"You may well ask if this is the case why didn't the shareholders move quickly last week? My fault - I got it wrong and couldn't contact people quickly enough", said Stockdale.
The Metamorph boss announced that while he was staying on as Chairman, he was being replaced as CEO, enabling someone else to manage day-to-day operations.
"All of you have had your confidence in both myself and the business rocked", said Stockdale, who promised that Metamorph's management "will do our utmost to regain your trust and rebuild your confidence in the business".
Stockdale said, "We've come a long way in a very short space of time and maybe we have tried to go too quickly. We have now 'had an accident', a bump in our road which has been a dreadful experience".
Apologising on behalf of the board, he told staff, "the lesson has been learnt, it will never happen again", adding, "you will never be let down again".
However, the company then failed to pay staff on time in August, sources told ROF.
One insider claimed that colleagues have had to lend junior staff train fares because they had not been paid, and that the firm owes multiple months' of payments into the employee pension fund. Another source alleged that the firm was under forensic investigation by the SRA.
Employees “remain in fear that they will be paid on time (or at all)", said a source. After July's delay, "Staff were paid even later at the end of August and we remain very doubtful of payments on time this Friday".
In his email, Stockdale named six individuals who he said would take on "enhanced roles" to "help to build both the culture and relationships that are needed for Metamorph to be successful".
When RollOnFriday asked Metamorph for comment, including confirmation it was under SRA investigation and would pay staff on time in September, the company provided the following statement on behalf of the six individuals named by Stockdale: "The business of Metamorph is an ABS run by a Chairman and CEO, Tony Stockdale, supported by a Board of Directors, most of whom are not lawyers".
"All the undersigned are employees. None of them are on the Board nor are they shareholders. None of the undersigned have any role whatsoever in the financial or strategic management of the business and specifically no involvement in any pension arrangements. No enhanced roles were ever undertaken as referred to in [Stockdale's] email".
“There is no further comment. However, due to the above statement the undersigned request that their names are removed from the publication.”
It almost sounds as if they are extremely keen to distance themselves from a massive, imminent car crash.
Gregor Samsa awoke one morning to find his law firm hideously transformed into dung.
"your confidence in in myself"
Poor reflexive pronoun abuse. *sobs*
Is this the same Tony Stockdale who was with Tenon?
Get out of there while you can!
Greed always occurs. Time for financial spectators and hedge funds to make a fortune on purchases of these law firms..
ive been paid on time and so have the rest of my team
I bet management are hoping non of their clients / customers will see this article…
Those at North West firm Bermans just taken over, and to be “rocket-fuelled, by MAPD (Make A Positive Difference) must be so reassured by this. Not!!!!
September's pay roll has been paid on time. Its now a non story with the firm bouncing back after a bump in the road. The timing suggests this is a bitter ex employee otherwise it should have been reported many weeks ago when it was relevant
Run while you have the chance.
In September. People have been paid on time.
I'm with you Tone. This is a non story. This twisted ex employee is just causing trouble. Don't let the haters get you down babe. xx
This isn’t a new problem, it’s historical that they’ve not paid on time some months, even cherry picking who should be paid and who waits and the pensions payments months behind.
Sugar coat it how you like, it is serious. How long before clients get wind of this? I’d certainly want to know if they were holding my money in client account…
This is a non story…….people not getting paid on time by a apparently profitable law firm is perfectly fine.
Strength in numbers | Profile | Law Gazette
Looks like he should have retired yonks ago...
In September some people will have been paid on time… some will have been asked to wait and hush.
Why are people downvoting that people have been paid on time?
It is not true that people have been paid on time in September. They are still paying people late and not giving information to the employees on what is going on.
Make that 3 months in a row…
There are some people who have been paid, but the majority of people have not - and those who have are paid nowhere near enough for what we put up with.
They are making out everything is fine, and its far from the truth
Paid on time this month, but most of the staff are jumping ship? Can't see this being good news for the firm.
No one is downvoting that people are being paid. They’re downvoting that people weren’t paid in first place and the historical shambles of payday at Metamorph that is continuing month in month out. Hopefully they resolve this issue and build trust again or they will loose lots of valuable employees. Look after the employees and they’ll look after the clients. It’s a shame this has been forgotten.
4% profit margin on last accounts....
A failure to pay on time amounts to constructive dismissal. This is not a non-issue that could/should be swept under the carpet because it is the clearest possible sign that the firm is in a poor financial situation and/or that it is being run poorly. The passages extracted from Mr Stockdale's announcement make it clear that it is both of these things.
Those that run the firm should be ashamed if they cannot pay staff on time, particularly given that most people are really feeling the pinch at the moment.
Oh dear oh dear according to the law society Goldhill and stockpile have just bought another law firm In Leeds which doesn’t appear to have been announced as it’s not mentioned on the firms they own 😂😂
I see there is a new law firm on their law society list is that what they used the money for 😂
It’s time to bring in Dave “I wrote the law firm playbook” Beech-Nut.
Except he’s trying to sort out his own train wreck.
Is Gerry Ratner available?
A failure to pay fully to pump the share prices is also a disgrace
That is a high turnover with very very low profits. What are they spending it on?
I would be looking for a new job if paid late even in just one month. A law firm is its people.
How worried should I be ?
Some staff are still yet to be paid for September… shambles.
We have bills to pay - is Tony going to cover my mortgage?
Where has our HR team gone?
I think this article speaks volumes
This happened when I was at Merricks years ago. First the late pay, then comes liquidation. Take whatever pay you can get then clear off. Don't look back, life will get better elsewhere
And I see on companies house MLL have just changed their name to Atray limited was this a sign for the winding up petition