More details of conveyancing group Metamorph’s problems have emerged after an internal email was leaked to The Law Gazette yesterday.

It is reported that three offices within the group’s network of companies in Chester, Sale and Shrewsbury have closed while some client accounts have been frozen by its banker HSBC.

Also, staff at some of the firms affected have not been paid since October and will only be reimbursed once the company that has taken on the work of other shuttered businesses with the group, Knowles Benning, has the funds.

Following a seven-year high street buying spree Metamorph was home to many of the property industry’s well-known conveyancing firms including big regional player Linder Myers Solicitors and national conveyancing firms Beaumont ABS and parent company BPL Solicitors.

It also included SLC Solicitors who provided debt collection and legal services to the property market.

In July last year conveyancing giant Simplify – which has endured several high-profile problems too – sold one of its brands to Metamorph helping raise its overall underlying revenue to circa £37 million.

HMRC and Connells

But despite such big numbers Metamorph has recently begun to unravel financially after both HMRC and estate agency Connells took legal action to wind up Beamont ABS after referral fees were not paid, while HMRC similarly moved against Linder Myers.

Subsequently Beaumont ABS has appointed liquidators and the client accounts of both BPL and Beaumont have been frozen by their banks and MLL has been placed into compulsory liquidation, it is reported.

What the latest revelations from Metamorph underline is whether the fees paid by conveyancing firm to agencies for referring customers is sustainable in the long term, particularly when often the big law firms compete on price for work and then have to give a hefty slice of their small profit margin to agents.

Read the Law Gazette report.

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