ONE of Scotland’s best-known law firms – Ross Harper – has been shut down after more than 50 years of practice, amid an investigation into its finances and the use of clients’ funds.
Ian Mitchell, of chartered accountants Henderson Loggie – appointed to examine the company’s finances last month – issued a statement yesterday that the firm would cease trading by close of business.
Mr Mitchell’s appointment as “judicial factor” followed concerns that clients’ money could not be accounted for in the company’s books.
The closure of Ross Harper was described in legal circles earlier tonight as a “tragedy” and “the end of an era”.
Staff were informed of the decision at a meeting in the firm’s West Regent Street office in Glasgow. It is estimated that when the firm is finally wound up, 40 to 50 jobs will be lost. The announcement follows uncertainty about the firm’s future after the Court of Session appointed Henderson Loggie to check its financial records at the start of April.
The move followed concerns flagged up by the Law Society of Scotland during a routine inspection of the accounts.
In addition to the appointment of the judicial factor, four partners – Alan Miller, Jim Price, Joseph Mullen and Paul McHolland – had their practising certificates suspended while the investigation was carried out.
Also, in the middle of last month, the firm was ordered by a court to pay almost £50,000 in unpaid rent on its Paisley office.
Mr Mitchell said they had taken “all reasonable steps to continue trading”, but the “extremely challenging financial circumstances” they found the company in meant it was always going to be difficult. He told The Scotsman earlier tonight: “There were a number of factors that have exacerbated the difficult conditions that led to us deciding that, even though I had the power to continue trading, it was felt that in the circumstances it was more appropriate to cease trading in the immediate time.
“It involved a whole combination of the various circumstances. Some staff were leaving in view of the uncertainty, they had managed to secure other employment, so they took advantage of the opportunity to move.
“There were other issues – bank accounts were frozen, there was outstanding rent of offices – it was just a case of us trying to maintain the practice on as little expense as possible.”
He added: “This led us to the conclusion that the most reasonable step in the circumstances was to cease trading with a view to tidying up the affairs and the orderly disposal of what is remaining.”
Reacting to the closure, Lorna Jack, chief executive of the Law Society of Scotland, said: “Ross Harper has been operating for some 50 years and is one of Scotland’s best-known legal firms. The decision by the judicial factor to cease the firm’s trading marks the end of an era within the Scottish legal profession.
“It is, however, an important part of our role to protect client interests and seek the appointment of a judicial factor whenever we have concerns that client money is missing or, because the accounting records are so poor, we cannot tell if client funds are missing.
“This was why we applied to the Court of Session for the appointment of a factor in the case of Ross Harper”.
The firm was set up by John Ross Harper in 1961 and became one of Scotland’s best-known legal firms, with a groundbreaking push into the high-street market, using TV advertising.
At its height, the firm had 12 offices in Scotland and was a specialist in personal injury claims, as well as criminal and family law, and became known for taking on cases that other firms would not touch.
However, it had recently entered a difficult period with the loss of many of its senior partners, including Cameron Fyfe, Professor Alan Susskind, Harvey Diamond and Richard Freeman in 2010, following a series of alleged disputes over how the company was being run.
Professor Harper was a high-profile lawyer and prominent Tory who, in his career, was president of the Law Society of Scotland and president of the International Bar Association.
In 1989, he hit the headlines when he was falsely accused by the Sun newspaper of spanking a prostitute with slippers at the Caledonian Hotel in Edinburgh. He was forced to resign as president of the Scottish Conservative and Unionist Association, but he subsequently won a libel case against the newspaper.
In 2001 he sold his stake in the law firm that continued to carry his name.
Earlier today, Mike Dailly, solicitor with the Govan Law Centre, described the closure as “a tragedy”.
He said: “I think most people in the legal profession will be surprised, because Ross Harper has a very long and successful track record in Scotland.
“It is very much a household name, and I think the understanding had been that they’d had difficulties in terms of partners falling out with each other, and people going their separate ways, but nobody knew that things were obviously as irreparable as the interim factor has said.
“I think it’s a real tragedy, because it’s a firm that’s practised for a long time and I don’t think anyone would want to see a firm that’s given good service to many thousands of people over the years end up going out like this.”
Mr Dailly added that his greatest concern was for the clients, saying that, despite the Law Society’s reassurances that they would be protected by the Guarantee Fund, he feared they would be left “in limbo”.
“In my current interim role, the priority remains to ascertain the assets and liabilities of Ross Harper’s, but if and when the court appoints a permanent Judicial Factor, all creditors will then be entitled to lodge claims,” he said.
The Ross Harper partners have until 10 May to lodge answers to the Law Society’s original court petition for the appointment of judicial factor.
Mr Mitchell said he remained in contact with the partners as part of his investigation.
The Law Society of Scotland said clients of Ross Harper who were affected by the decision to cease trading could continue to contact the judicial factor, Henderson Loggie.