Eddie Goldsmith, partner of Goldsmith Williams Solicitors, said that the demise of another major player in the conveyancing sector was a stark reminder to all advisers to check the legal firms they work with.
Goldsmith said: “Fridays was long regarded as a substantial nationwide firm but, while the failure of such brands would once have been unthinkable, this trend is now becoming a regular event for the industry.
“Reputation is everything. At a time when lenders are constantly tightening their panel criteria, it is crucial that brokers and legal services providers stake steps to retain people’s faith in what we do.”
He highlighted other high profile casualties in the sector included Hammonds Direct and Fox Hayes, which both went bust at the beginning of 2009.
Fridays Property Lawyers went into administration at the end of December last year, with the scrapping of HIPs by the government in May 2010 playing a key part in its demise, as it was heavily reliant on the sector.
Goldsmith added “While there is no suggestion of any wrongdoing at Fridays, it goes without saying that if clients are referred to unreliable firms or those in crisis, it can be incredibly damaging to their perspective of the industry and relationship with all parties.
“The reality for brokers is that when they refer clients, they must conduct thorough due diligence on the activities of their chosen law firms, rather than assuming that the SRA or other bodies are fulfilling that role on their behalf.
John Malone, chairman of PMS, backed Goldsmith’s warning.
He said: “Experience tells me that when operating in a recessionary period everyone must be on their guard to ensure our business connections are fit and proper for purpose.
“Clearly, another high profile casualty in the conveyancing legal sector further demonstrates how crucially important it is to know who we are dealing with. The initiative taken by Goldsmith Williams is one I completely support in assisting some basic activity to ensure those solicitors that are fit and proper for the work they have been instructed to carry out.”
