Optima reprimanded by the SRA over Capita investment

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  • SRA not really on the ball here - attacking a structure that the SRA itself will allow - and help regulate - from Oct 2011, meanwhile allowing law firms such as Halliwells to run riot in terms of how they were managed that did real damage to people and the profession. Seems to me the SRA is more worried about being a jobsworth-style, pedant over timelines than looking at truly negative behaviour of some law firms. Another own goal from the SRA and surely they could have come to a more sensible conclusion than dismantling the whole Optima deal?

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  • So the sum total of this is the the SRA are saying "you cant do this - YET! - but if you wait 14 months you can" At least Optima have the benefit of now being at the forefront of ABS having been through it once.....

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  • As an ex employee of this firm I can confirm that it did seem to me that Capita were all but running the show and I always had grave doubts as to the legality of the arrangement in the context of the profession as a whole.
    This seems to be backed up by the ex CEO of Optima, Adrian Lamb putting in his linkedin profile that his previous employment position was CEO of Capita Group Plc Legal Services Division and with no mention whatsoever of Optima Legal Services.
    Knowing what I do about Optima I am disappointed that the SRA only reprimanded the Partners on this occasion.

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  • So the whole Optima multimillion pound empire was built on a mountain of debt and breaches of the solicitors rules.
    I bet Anthony Ruane & Co must be really upset at the hefty penalty set down on them by the SRA.
    Yes the SRA will allow and control ABSs from October 2011 but that is not an excuse for Optima to have run an ABS since 2007 when all the rest of the solicitors firms are trying to stick to the rules. We could all have cheated to build our empires and destroy the competition but some of us have more scruples

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  • If anyone would like to invest £35m in my firm I think I can still scrape together the SRA £7K get out of jail free fee...

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  • There is no suggestion it seems of any cause for concern regarding the legal services provided and that is both reassuring and supportive of the notion that such arrangements will soon be not only feasible but also unlikely to do any disservice to clients (there will be mistakes of course because humans are involved...and long may we remain so). Properly funded, properly managed...are these not among the shortcomings of traditional firms that the LSA was intended to address so as to provide a competitive market in which costs can come down without a decline in service?

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  • The SRA have serious issues to address in establishing a consistent and transparent policy for regulating solicitors firms in the pre-ABS environment. Their starting point that any firm borrowing money to finance itself compromises its indepedence thereby breaching Rule 1 is flawed. Many law firms borrow money, the critcism of this by the SRA overlooks commercial realities. Optima may have over-stepped the mark but many other firms have not and yet still find themselves engaging with the regulator in an unnecessary and costly debate about commercial convenience and professional propriety.

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  • Peter Rouse is missing the point. These people are breaking the rules even before they are permitted to run an ABS. What chance has the public (who the rules are designed to protect) that they will comply with the rules in future?

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  • Optima first came into being in 2006 funded by Capita. This has been going on for four years now. As a direct result of Capita's non arms length investment Optima have now grown to what their ex CEO (who we now find to have been employed for the last four years by Capita as the CEO of their Legal Services Division - (although they don't actually own up to having a Legal Services Division in their annual report)) proudly boasts to be "the largest volume legal services operation in the UK".
    Hubris! Presumably Optima must have been made to provide evidence to the SRA of their actual ability to repay the loan to satisfy them of their solvency otherwise we could have another Halliwells scenario on our hands. I am lead to believe that they are already making cutbacks and that they might not be taking any trainees on next year. This is third hand info and as such I can't vouch absolutely as to its veracity.
    One thing though, this quote from Capita suggests that they might resume the money drip at a later point “Optima continues to be a successful business in which we’re comfortable to invest.”.....
    Lets hope the SRA will be monitoring the situation carefully.

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  • Wasn't that long ago that Ruane was bragging about their set up being the only sustainable business model. Built to last..........we'll see.

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