"It pays the WIP or it never leaves."
Knights has failed in its audacious attempt to force a partner to personally pay it back for her unbilled work in progress after she resigned.
Katie Brassington joined Knights’ Chester office from Slater & Gordon as a partner in its private client team in 2016.
One of her duties was acting in Court of Protection (COP) matters as a professional deputy, which required her to make legal decisions for people lacking the mental capacity to do so themselves.
Fixed fees for deputyship work are recoverable from the estates of clients after the costs have been assessed and capped by the Senior Courts Costs Office (SCCO).
An oddity of COP matters is that, because the lawyer is acting for their mentally incapacitated client, the engagement letter is not only sent by the lawyer or their firm, it is sent to the lawyer as well, to sign on the client’s behalf.
Brassington said that when she moved to Knights she was given no choice but to use its standard template letter of retainer for her deputyship matters, which set out that she was agreeing to purchase from Knights the legal services she and other Knights staff were providing to their COP clients.
Brassington said she complained to the compliance department that the letters were unsuitable, but to no avail.
She had a second concern which she said was ignored. Fees for deputyship matters routinely exceeded the SCCO cap, meaning that a portion of the bill was disallowed and could not be recovered from clients’ estates. But Knights, instead of writing off those irrecoverable fees, let them sit on the files as work in progress (WIP).
In respect of the COP client identified as ‘P’ whose matter formed the subject of the dispute between Brassington and Knights, the disallowed sum which was preserved on the file as WIP amounted to £166,468.97 by the time the partner resigned in 2022.
Brassington had made a request to Knights' accounts team to write-off the irrecoverable WIP. But the value was so large that approval could only be given by Jessica Neyt, the Chester office’s Client Services Director, or David Beech, Knights' CEO. Her request was never processed.
When she resigned from her £110k role at the 1,100 fee-earner firm, it had a nasty shock in store for her, which a source branded “Insane step number one”.
The listed company informed Brassington that when she signed the retainer letters on behalf of her incapacitated clients, she had actually become a client herself and, as such, was personally liable for the £166k which she and her team incurred working on P’s file.
Knights told Brassington that she would only be able to take her deputyship matters to another firm subject to "payment of our work in progress and all outstanding invoices".
Neyt wrote to her explaining that the retainer letters for P “say that you, as our client, remain responsible for payment of our fees and disbursements in full at all times".
After Brassington issued a claim against Knights seeking a declaration that she was not personally liable to the firm for unrecovered WIP, it took “Insane step number two”, said the source, and opted to defend the claim.
Brassington was granted a hearing for summary judgment, where her lawyer contended that Knights’ approach was ”unprincipled and unprofessional”, and relied on a "commercially absurd" understanding of the deputyship role.
The firm had told staff that they should record all their time "fearlessly", which took on a more ominous meaning as Knights' legal team made detailed arguments seeking to prove that its deputyship lawyers had put themselves on the hook for the cost of their own work.
Knights' position also saw it washing its hands of the vulnerable clients. In advance of the case, it wrote to Brassington's lawyers asserting that "Knights has no duty or obligation to the various patients whom Katie accepted responsibility for" and that "We are not involved in Katie's patient relationships or her duties and responsibilities" to them. Her lawyers told the hearing they were "startling claims for a firm of solicitors which provides deputyship services to advance".
Judge Hodge KC noted that Brassington's WIP had accumulated over six years, yet in all that time Knights had never asked for payment, nor required any other deputy to make any similar payment, according to Brassington.
He also observed that the WIP represented amounts which had "not been billed, and could not be billed, to P because they represent fees which have been disallowed by the SCCO”, but that while Knights accepted it could not pursue P, it had refused to hand over Brassington’s files unless she paid up the same irrecoverable sums.
An insider told ROF, “When she handed her notice in, they put her on garden leave immediately…Many of the families trusted Mrs Brassington very much and were very distressed when they were told they couldn’t talk to her”.
The judge said he had “no hesitation” in preferring Brassington’s submissions.
“Both parties understood that P, rather than Mrs Brassington, was Knights' true client, as evidenced by the way the client was identified and referenced in Knights' statements of account and, by inference, its files and other records”, he ruled.
Knights had attempted to dismiss the fact that all of its files referred to P as the client as a “pure matter of administrative convenience”.
In fact it was “common sense” to refer to P, said the judge, as “after all, the work Knights was being engaged to carried out was for the benefit of P, rather than Mrs Brassington personally”.
He also addressed the bizarre consequence of Knights’ line of argument, which was that all its lawyers who had acted as deputies and co-deputies under the standard engagement letter would be similarly liable for their clients’ fees.
“I do not accept that, by her standard deputyship letter, Mrs Brassington, still less her family co-deputies, were assuming any personal liability for any irrecoverable remuneration and expenses incurred by Knights”, he said: "Those co-deputies certainly never gave their informed consent to the assumption of any such supposed personal liability”.
“Nor can I understand why, if Knights ever considered and understood that Mrs Brassington (or any of her co-deputies) had assumed the risk of non-recovery of Knights' remuneration and expenses through the SCCO process, this was never drawn to her (or their) attention at any time during the period of more than six years that unbilled WIP was mounting up (to a level in excess of £166,000)", he said.
The judge expressed bafflement at Knights’ contention that the retainer letter operated to make Brassington liable for irrecoverable WIP, but not P. “I find it difficult to understand how the same words can bear different meanings, and produce different effects, for Mrs Brassington and for P. Counsel have supplied me with no satisfactory answer to this conundrum”, he said.
The judge was too polite to spell it out, but multiple sources amazed at Knights’ conduct were not.
“Getting desperate”, "Another fantastic example of Knights being unreasonable”, “Embarrassing stuff”, they said, while a fourth suggested the problem amounted to more than just sour grapes: “1 deputy = 166k. They have several deputies so it’s a big mis-statement of WIP!”
“Storing it up so it can shaft unsuspecting employees when they move on", added another: "Which spivvy firm would try that one?”
RollOnFriday asked Knights whether it would appeal. ROF also asked what possessed the firm to pursue its own former employee for irrecoverable WIP by using the idiosyncrasies of Court of Protection requirements to make out that she was a client. And we asked what message its stance sent to other Knights’ staff except, ‘If you’re not with us, we will do whatever we possibly can to hurt you’.
The firm declined to comment.
Brassington said she was unable to comment as the proceedings had not entirely concluded.
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Comments
141
42
It is a plc! It’s been caught and outed actively mis-stating it’s WIP and padding it’s balance sheet. Where is the RNS identifying how much the balance sheet is inflated by?
Surely this is a matter for the SRA? Knights is misleading its investors.
135
48
What a scuzzy thing to do.
Note to myself, never ever join this scuzzy firm.
119
52
Will there ever be a week when something ridiculous doesn’t happen at Knights?
90
40
Never has a quote been more apt - “Dictatorships start wars because they need external enemies to exert internal control over their own people”
106
41
Beechy told us that after lucky Kate sold her shares, the share price would recover in 18 months. He can’t really dock our wages by 10% again to manipulate the profits, so disloyal ex-employees have got to be fair game.
My Knights shares are so far underwater I’ll need Titan ll to reach them.
119
47
Bets are no longer being taken for this year’s Golden Turd award. The engraver has already got to ‘Knig…’. Do they get to keep it if they win it three times?
Victimisation and bullying of a departing employee is not a good look for any business, let alone a listed law firm. If this was an attempt to lay down a marker for other fee-earners looking to tunnel out, it has royally backfired (and, let’s face it, that stable door has been dangling off its hinges for some time).
Huge credit goes to CB for having the tenacity and self-belief to fight back against the bullying behemoth with endlessly deep pockets. And his firm.
Knights, stop sniffing the glue and start sacking whoever espoused this witch hunt – that would be neat.
120
45
Leaving aside the ridiculousness of Knights' legal position, what an absolutely rotten way to treat a former colleague, and what a crashing disregard it shows for continuing colleagues.
I don't know whether this fiasco is a symptom of Knights being publicly traded and thus being driven by non-lawyers with no understanding of the legal principles, or whether it simply is the result of a firm lacking competent leadership, but on either case it needs a vigorous shaking up.
110
39
Jessica Neyt CSD and contentious probate ‘expert’ gave a witness statement in support of Knights’ position and must have thought this was a runner! Ffs
108
41
This looks like an attempt to create a platform so Mrs Brassington and/or her new firm would stump up some cash.
Good on her for having none of their spivvy behaviour and sticking it to them in court.
You do have to question the decision making abilities of those who thought it would be a good idea to take this all the way. We now know that Knights balance sheet flatters to deceive.
Strong sell/avoid like the plague.
88
45
Probate expert.
Property expert.
Court of Protection Expert.
Dibble dabble
77
52
My takeaway is that a “partner” was being paid £110k. Which is pretty desperate.
98
39
Will have to scale back on the staff benefits to settle the pending costs order. That’s everyone having no free fruit for a month
111
42
Getting fee earners to be personally liable for their WIP, genius, there is no way that sensible and well-thought-out decision could ever backfire.
95
46
If the rules only allow a certain amount to be charged to the client in those types of cases then why would unrecoverable "WIP" be a liability of the client and (on their poor case the ex partner)? Knights is a floated company - does it need to report itself over this?
94
40
Share price drops 6% in early trading. Who knew ROF news had such influence?
92
47
"My Knights shares are so far underwater I’ll need Titan ll to reach them."
Dodgy submersibles and Knights have a lot in common, both reach down far into the murky depths and plumb new depths before going pop.
90
40
Oh, Knights. Can't you go one week without embarrassing yourself?
105
36
My favourite part of the judgment is where the Judge highlights Knights view that it owes no duties to any of the vulnerable people who pay Knights bills. This is Janet snd John stuff - Knights position is embarrassing. Their lack of knowledge is astonishing.
A law firm that can’t properly advise itself! Goodness me.
95
45
Well if anybody was considering working there hopefully this comes up in their due diligence!!
73
43
Just how dangerous can a court of protection/private client lawyer be? They are the nicest of us nasty lawyers.
I’m assuming that Mrs Brassington didn’t toe the line.
Why on earth did Knights pursue this?
52
73
Anyone else wondering why a partner wasn’t capable of simply amending the retainer letters to suit..?
70
44
This must be a new low in the way law firms treat you when you leave.
89
36
@09.36. ..because the dictatorship wanted everything strictly regimented. Partner in name only
61
65
Not wishing to defend Knights , but it seems that neither Brassington nor Knights really understood how she should be engaged.
Still not a good look and best dealt with quietly
97
45
If you need a reason not to use or work for Knights then here it is. Lawyers are expected to display sound judgement, so why bring this case, which was clearly made in spite at a departed partner, that was never going to turn out well for the firm - even if they won the headline remains disastrous for them.
No class.
100
33
A shameless attempt to grab money off a departing partner. Shame on you, Knights.
91
36
Absolutely shocking. The SRA should investigate and strike off the senior decisionmakers who launched the claim.
79
35
Ah, yes. I remember the first day of my dispute resolution seat many moons ago when I was a trainee. The partner said to me, “as a disputes lawyer, you will need to execute both legal and commercial judgement when dealing with cases.”
Looks like whichever trainee Knights handed this case to failed on both accounts.
83
42
Even amongst the listed law firms, Knights stands out as the worse. And let’s be frank, there’s some shoddy competition.
88
44
Knights are not only in the running for the next Golden Turd award, they’re also leading in the award for Biggest K***ts in the profession
107
42
For those asking why a partner wasn’t capable of amending the engagement letter or not understanding it, you don’t understand Knights way. You are not allowed to divert from the precedent engagement letters, to the point where they even pre-draft your emails sending out the engagement letters which you weren’t allowed to amend to even sound more friendly at one time. The compliance team are rigid and everyone must abide to their rules. I think this shows that Knights make it up as they go along as they aren’t very good lawyers.
100
46
Truly baffled by this. Not only the fact that Knights tried to litigate this BUT Jess Neyt (who is a contentious probate lawyer by trade) also went along with it. It just goes to show both how: (A) poor Knights management is; and (B) how individuals sat in CSD/senior positions are simply yes people...
69
41
BLM treated its former partners in the same way: demanded that they repay their last 3 months of drawings and then raided their tax accounts. Be careful making an enemy of your former partners
80
46
Has knights self reported its conduct to the SRA? If not it should.
78
40
Looks like Knights represented themselves in this case and instructed Counsel for the summary judgment hearing.
As Abraham Lincoln said: “He who serves as his own counsel has a fool for a lawyer and a jackass for a client”
91
47
Well I for one feel sorry for Knights.
Knights' decision to pursue Mrs Brassington for unbilled WIP was not in the slightest bit spurious or ill advised. Just because they pursued her personally and none of the other deputies or the actual patient clients, nor questioned the unbilled WIP over 6 years until she resigned...doesn't mean this was a witch hunt designed to cause her the maximum discomfort and anxiety.
That experienced High Court judge clearly has no clue what he's on about.
(Dave, if you could squeeze me in to the villa in Portugal between 14th and 21st August, that would be ace. Cheers big fella)
88
38
This is a disgrace but just highlights the under- lying culture that Knights management team are like a plague. They take what the want; self-serving belief they have a right to it. Employees, take-overs and sod those families they destroy. […]
95
34
I’ve just read the judgment with increasing degrees of incredulity.
Firstly, there is the astonishing ineptitude. Secondly, the naked greed and unethical conduct and lastly, the very obvious vindictiveness of those calling the shots (which was not the poor sap lumbered with running the case who must be ashamed of herself for not pushing back).
Money can’t buy you class and boy doesn’t it show with this lot?
88
40
Not really a ringing endorsement of the CSD’s legal or managerial competence, to put it mildly.
83
41
Not really evidence of the #oneteam mantra eh - I haven’t heard from anyone who agrees with their approach on this.
In other news the latest fruit supplies are absolutely skanky. Yellow satsumas the size of conkers have recently been spotted…
96
45
There is no ‘class’ and as for #oneteam - that’s only for the top tiers. Those shareholders must be thinking this is a sinking ship. I bailed out when I saw what a disgrace this firm is. The SRA should look deeply into all of Knights’ work ethic now.
92
42
Another ridiculous move by Knights. Awful for the employees who still work there and are panicking that Knights will go after them when they inevitably leave. Disgusting way to treat a former employee from a disgusting bunch.
74
46
Well the fruit isn’t even Class II according to the government guidelines. More like Wonky Veg 😂
82
34
There was an RNS today, filed with the LSE, saying that this investor, Wasatch Advisors, LP, has off loaded a chunk of shares.
But no RNS to say the WIP on the balance sheet is overstated and to what extent it is overstated. One deputy = 166k. How many deputies are we talking about and how much per deputy is attributable to overstated WIP?
Can we trust the WIP figure at all? If so, explain why.
RoF readers know the WIP is overstated, those who read case reports know, but the wider public do not know, which is why an RNS is needed.
You’ve got to take your medicine where you get caught overstating WIP especially when you are a plc with reporting obligations.
88
45
Bet this shambles doesn’t get a mention in todays call. #oneteam and the year of fun have turned into austerity and some left over booze from a poorly attended client event
84
37
Shares in Knights plc - worth 410p in Dec 2021. Now worth 63p. I give them 5 months, tops. Sell while you still can.
80
43
They reported me to the SRA when I left. Some spurious allegation under AML regulations (which they control). The SRA threw it out but it took them a year. This lot really are vindictive beyond belief.
88
46
…just removed them off our panel
76
40
Who's still holding Knights shares....? This is going the way of Ince and MJ Hudson. And look at the RBG share price - down she goes!
65
43
Quite concerning from a former client, especially when the pressure is on to go out there and win new clients.
84
43
What on earth have I just read? Are those running this business incompetent, insane, or both?
Why take this risk and damage your reputation on the back of a small beer claim?
81
38
Now, just suppose you are a potential lateral hire weighing-up an offer from Knights. Would this make you: (a) more inclined, or (b) less inclined to join? Answers on the back of recruitment agent's payslip to rollonfriday.
82
37
....and by the way, guys - don't invest in a listed law firm unless you have money to burn. Investments may go down as well as falling off a cliff.
66
36
The thousands of lawyers who have left Knights over the years will have breathed a collective sigh of relief!
Enjoy the comedy whilst you can. I don’t expect Knights to be around for too much longer.
Recruiting must be an absolute nightmare for them.
75
36
Bet Brassington’s four dials meetings were fun! They’ll be spinning now.
59
46
Which firm represented Knights? They must have known it was a hopeless argument which contradicted itself. Was it even arguable??
It’s doing nothing to rescue their client from their fast track to self destruction. Pat on the back all round. Another well thought out own goal.
57
17
Oh dear, what a royal shambles. Dave and his stooges (aka CSD’s) have clearly lost their marbles. Their cavalier strategy has been found wanting.
How they thought pursuing, and thereafter resisting, the claim was a good idea beggars belief. Who is leading the strategy for this car crash of a business? They need sacking.
More noteworthy, they have exposed their misconceived stance to billable WIP to the wider public (and investors). There’s only one way this is going to go. Jump out before it’s too late.
77
38
The judgment doesn’t explain what a CSD is. Is the CSD responsible for this poor decision because she made the decision to litigate?
If so, her future looks…erm….uncertain……
65
38
It looks like the bully got taken down.
75
33
The acquisition of Shulmans was an absolute disaster. All the decent people left soon after, refusing to tolerate the ‘smash and grab’ business methods. Desperate Dave has got to try and claw some money back from somewhere.
77
37
“I know it’s over” by the Smiths seems a rather apt one for the next partners conference (if they make it that far).
85
33
No Class
You can take the multi-millionaire out of Stoke, but you can’t take the Stoke out of the multi-millionaire.
78
43
Wth, are the CSD’s all under a spell where they won’t stand up to db and say this is a non runner. Are they scared to say no or are they too bullied to be hard or did an experienced lawyer think she could defend this? The CSD that ran this is a lovely person when I have I interacted with her, good lawyer but this was mad going after an ex lawyer for wip. No way anyone can know would join this rat pit. JN you are better than this
70
33
How wonderful would it have been for our PI policies had this ruse worked? No duty of care owed to any clients, just load up the employees with all the duties and costs liabilities.
If it wasn’t for that pesky High Court Judge, we could have gotten away with it.
83
43
What were they thinking?
83
48
I do wonder how those early partners who sold their firms to Knight's and took a large percentage of that in shares feel now. I know how the former staff that they shafted feel, that's for sure :-)
56
16
A wonderful advert for the Golden Turd winner.
60
22
I’ve just taken a look at Knights full year results. Organic growth is flat. Winning the golden turd, numerous horror stories, practically weekly RoF exposures and running hopeless cases against ex-employees won’t assist the organic growth.
Knights will be in real trouble if it cannot continue to grow by acquisition to counter the fee earner and client churn.
It seems to be following the same trajectory as Slater and Gordon.
Whilst I consider law firms to be generally uninvestable, this one seems to me to be particularly high risk because of the unprecedented levels of negativity surrounding it.
46
20
Simply Wall Street doesn’t think much of its recent results.
69
25
To the Knights toadies disliking some of these legitimate comments condemning your employer’s actions, I’m interested to know - are your computers being monitored by the top brass or do you genuinely believe that this kind of grubby behaviour exhibited by your overlords is acceptable?
Fear or stupidity.
64
18
#OneTeam until you’re leaving. Knights will then do all it can to ruin you.
Take heed sellers and candidates. Don’t buy into the spin or the skanky fruit and speak to the numerous escapees who will regale you with numerous tales of a toxic and dysfunctional organisation.
51
14
Employees at the top paid ridiculous high salaries to sit around 'that round table' and ensure they don't question or disagree with db. Who was responsible for this decision - db or CFO? Do we think this is the only case? It was only a matter of time until that golden turd found its way back into our firm.
47
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Interesting how all the down votes are mostly more or less the same amount. A highly biased vested interest may perhaps be the common denominator there.
Now watch as this comment gets the same number of down votes!