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Record number of solicitors at risk of insolvency in 2010
Wednesday 6th January 2010Most solicitors firms will be accustomed to dealing with insolvency; however an increasing number may be seeing it from the other side in the upcoming year, according to an expert.
Richard Glithero, the head of insolvency at Manchester solicitors Pannone, has told the Manchester Evening News that a record number of legal firms in the North, as well as across the UK, are predicted to become insolvent this year.
The insolvency expert warned that smaller businesses will be most at risk of failing, as larger household names become more dominant in the sector.
Mr Glithero has attributed this problem to the huge increase in fraud since the onset of the credit crunch. He explained that during the years of loose credit, a number of smaller solicitors were found to be colluding with unscrupulous surveyors and buyers in order to commit fraud against lenders.
“As a result, many banks and building societies believe smaller practices can’t be relied upon to protect their interests and therefore do not want them on their panels for conveyancing work.” He told the paper.
This means that practices reliant on conveyancing work will be particularly vulnerable entering 2010.
98 legal firms folded in the second quarter of 2009, according to figures from the Solicitors Regulation Authority. This marks a rise of 21% on the same period the year before, and Mr Glithero said it would be likely to see a similar jump in 2010.
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