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Axiom Ince staff have been left to fend for themselves as the firm tells clients it is closing and police launch an investigation.
Departing partners have informed clients that the business is winding down and “will cease to trade in the near future”, as ROF revealed on Monday.
Axiom inflated rapidly by purchasing Ince and Plexus at firesale prices after both firms went into administration. But then it emerged that £64 million had been lifted from Axiom’s client account, apparently courtesy of its founder and then Managing Partner, Pragnesh Modhwadia.
When the shortfall came to light, the SRA intervened into Modhwadia’s practice and those of two other partners and Axiom Ince fired him. It has obtained a freezing order over Modhwadia’s assets, although almost all of the money appears to have been spent.
The SRA said it had been liaising "with relevant law enforcement authorities in relation to this case”, and this week the Metropolitan Police confirmed that detectives from its Specialist Crime unit "have launched an investigation and enquiries are ongoing". It said no arrests had been made.
SRA Chief Executive Paul Philip said this week that “there appears to be a fairly blatant act of dishonesty” but insisted that the SRA had “done everything it should have”.
The plundered firm is now in freefall. Ince & Co's website has been switched off and teams of lawyers have been leaving as quickly as they can. So far seven have left for Birketts, seven for Irwin Mitchell, approximately 17 to Wikborg Rein, 10 to Greenwoods, and 30 have gone to Horwich Farrelly. DWF confirmed that it has also taken 25 people who handle Direct Line Group matters.
Some solicitors left behind were clueless about their bosses' departures until they vanished, according to sources: “The partners who walked did not even tell their teams they are going. It’s a shambles”.
They’ll need a strong drink before reading Horwich Farrelly’s “absolute doozy” of a press release announcing its hire of Jennette Newman, who was the Managing Partner of Ince & Co, the Managing Partner of Ince Gordon Dadds, and the Head of London at BLM before that.
Despite the fates of all three firms, according to Horwich Farrelly, “Jennette’s leadership skills include a track record of delivering operational transformation, business innovation and the development of successful teams as well as excellence in client service delivery”.
“She certainly operationally transformed BLM and Ince”, said one of her former employees.
ROF asked Horwich Farrelly if the press release was tongue in cheek. To its credit it responded, explaining that “Jennette had a long and successful career at BLM, becoming Head of London Markets Business. She was headhunted by Clyde & Co where she occupied a similar role until headhunted by Ince & Co. At Ince & Co Jennette headed up, and grew, the insurance division despite market turbulence. There she inherited business decisions not of her making and she agreed to come out of her career role to help the people and the business as it faced those issues", said a spokesperson.
Hundreds of Axiom Ince staff weren’t as fortunate as Newman and are still stuck there, having not been afforded the c-suite’s advance access to evidence of how desperate the situation really was, they said.
Trainees and future trainees have been particularly hard hit. “The SRA has done nothing for us (despite this being partly their fault)”, a current Axiom Ince trainee told ROF. “The Law Society have also not helped. There is the training principal who is trying to help the trainees - however there is only so much one [person] can do”.
Another said, “I have also lost my training contract. I was due to start next month and the firm have been no help whatsoever in helping me find another one elsewhere. They have abandoned us”.
The SRA said that it deals with the administrative aspects of training contracts but not the employment side, which was where the Law Society stepped in. When contacted by ROF, the Law Society pointed to a statement of support it provided to trainees when Ince imploded in April.
Gently quizzed on whether it had anything to say about the larger group impacted by the current collapse, a spokesperson said, “The support we offer for the trainees is summed up in the linked resources, and includes pastoral care which can be accessed through the Law Society helpline. Our career clinic also offers a free one-to-one 40-minute consultation with a legal career coach and we would encourage all trainees who are seeking further support to get in touch with us”.
Its help may not be needed by everyone. “As a junior that’s just recently left from Plexus/Axiom, I wouldn’t be surprised if my cohort decide to totally change career paths”, said a disillusioned escapee.
Axiom Ince employs approximately 400 business services staff who described being "utterly abandoned" and betrayed by supervisors they trusted. PAs, some with decades of service under their belts, have been “dumped by their partners and left behind”, said insiders.
Internal communications from the Axiom Ince board are “non-existent”, according to sources, who said they first learned of the firm's impending closure when they spotted the template email being sent to clients, or read it on ROF.
Staff are now coming to terms with the reality behind the messages of community they were fed. “When it's all going well it's alllll about mental health, but when sh*t hits the fan it just shows how much they actually care about you”, said an employee.
Axiom Ince offices have become “a dumping ground of leftover files" while those who can are simply walking out of the door, claimed an insider: "people are leaving within an hour of resigning”.
Although Axiom directors were “telling the media that they are helping staff find new jobs", it's "utter bs", claimed a source. "No-one has offered help. It’s utter chaos and none of our emails are being answered”.
Several insiders voiced concerns about their pension contributions, which they said have been taken from employee salaries but not paid to pension accounts “since June”.
“There is nobody at Axiom prepared to explain where the money has gone. This is very concerning as some of the contributions were significant.”
It is not just employees the firm has ghosted. “Axiom have been avoiding their clients for months. I answered hundreds of their calls", said a receptionist. "It was getting a bit difficult when clients were asking if I had stolen their money, when I knew they had!”
The Board did not respond to ROF's request for comment.
Update: ROF understands that staff were informed by “The Board” on Friday that no further advisory work can be undertaken by legacy Axiom and Plexus staff from Saturday, as their professional indemnity insurance policies expire on that date.
Having met with the SRA on Friday, it was established that “members of the firm employed by Axiom DWFM and Plexus must not provide or undertake any legal advisory work”, states the email passed to ROF.
”To do so would be a breach of your professional obligations and may also render the fee earner personally liable”, continued the email.
“We regret writing to you to inform you of these developments and indeed, the current status of the firm”, it concluded.
Update 2: On Monday, the firm informed staff that the SRA had intervened, it was appointing an administrator, and staff would be receiving notices of redundancy that day and the next.