23 April 2026
More than £39.5 million of client funds from PM Law Ltd are understood to have been at the centre of “sophisticated suspected fraud”, following a detailed investigation.
Leading audit and accountancy firm Spencer Garden Dickins says the revelations, which emerged as part of an intervention by the Solicitors Regulation Authority (SRA), highlight the critical importance of strong financial controls and accurate, detailed audit reports for legal firms.
PM Law is a national group comprising 11 companies, with 25 offices and more than 30 trading names.
Its various sub-brands, such as Butterworths Solicitors and WB Pennine Solicitors, operated across Yorkshire, Cumbria, Berkshire, Derbyshire and London.
Clients and the wider legal market were shocked to hear that all parts of the group had closed on 2 February, with PM Law later entering into voluntary liquidation on 3 March.
As part of its investigation into the “improper removal and misuse” of millions of pounds of client money, the SRA reviewed more than 25,000 emails and letters and 17,000 inquiries.
More details of the case are likely to emerge over time and a £21 million compensation fund has been created by the SRA, with 92 claims totalling £9.31 million already paid to those affected, with a further £6.8 million paid out to clients from money held within the firm’s accounts.
Demsey Slater, Audit and Accounts Director at Spencer Garden Dickins, said: “The findings of this investigation are significant and point to a critical issue within the financial controls of PM Law.
“Under the SRA Accounts Rules, firms must conduct an annual audit if the balance of client money they have held or received exceeds an average of £10,000 and a maximum of £250,000, so PM Law would have had to have been regularly audited.
“Depending on when the latest audit was conducted, it should have picked up this serious discrepancy within the client accounts or spotted any weaknesses within the group’s accounting and assurance processes.”
Demsey said that for such a large law firm to fail on the basics of managing client money is likely to draw the attention of the SRA to other firms, both large and small.
“This case just highlights the importance of good compliance and the value of a thorough, regular audit,” he added.
“Complex fraud can be a challenging issue within any business, but by having the right financial controls in place that are reviewed and improved using the insights of an audit, this element of risk within a firm can be reduced.
“This case will only force the SRA to be more stringent in its checks of firms’ accounting practices.”
It is also understood that South Yorkshire Police is investigating the alleged fraud to determine whether legal action should be taken against those involved in the case, which has left more than 600 staff members unemployed and thousands of clients in disarray.
If your law firm requires an audit or you feel that your practice may benefit from tighter financial controls, please contact Spencer Garden Dickins by visiting www.sgduk.com/