In today’s email:

• Netflix for books

• A world record cheese pull

• The end of a 150-year firm

• Amazon’s being sued again

• The lowest deal activity in 10 years

• Sports, but without the mansplaining

• Your favourite sandals are going public

… and more!

EDITOR’S RAMBLE 🗣

Before we get to the commercial news, there’s been a big event in the world of cheese. 🧀 

The world record for the longest cheese pull has been set in Somerset, England (of course it was in the village of Cheddar).

A helicopter dipped a massive tortilla chip into a special cheese blend within a 4-metre-tall pile of nachos and stretched the cheese 15 metres into the air.

(if anyone uses this as a in a law firm application, I’d like to meet you)

- Idin

🔈️ Quick shoutout — I want to thank Rohan Vekariya for sharing the newsletter this week 🙏 

FEATURED REPORT 📰

❌ This is how Axiom Ince ended

What’s going on here?

The law firm Axiom Ince has been closed by the Solicitors Regulation Authority (SRA).

Who is Axiom Ince?

First, you need to know about Ince & Co — a law firm founded in 1870 which grew to be one of London’s leading firms for maritime law.

By 2021, as Ince Group, it had over 700 staff worldwide with revenues of £100m.

But Ince Group had its problems — it failed to publish its accounts on time, key partners left, it suffered a cyber attack... Eventually, Ince Group collapsed in April 2023.

Good news did follow, though – one month after, Ince Group was rescued by another firm, Axiom DWFM and the two became Axiom Ince.

So, what happened to Axiom Ince?

Okay, so here goes…

• 🚢 Late May 2023: Axiom Ince rescues Ince Group.

• 💸 August 2023: SRA suspends three directors of Axiom Ince — Pragnesh Modhwadia, Idnan Liaqat, and Shyam Mistry — amid allegations of a £64m fraud.

• 📜 September 2023: After the allegations of fraud, the Metropolitan Police start looking into financial misappropriation in the company.

• 🏃 September 2023: An exodus from Axiom Ince begins. Four lawyer teams, including the private client and tax groups, leave the firm in a single day. 17 lawyers from the firm's shipping and insurance team also depart.

• 📉 2 October 2023: Axiom Ince files a notice of intention to appoint administrators. The firm's website goes offline, and the firm informs its clients it will soon cease trading.

• 🚓 3 October 2023: The SRA officially shuts down Axiom Ince to protect the interests of clients and former clients. The intervention is among the largest and potentially most expensive in SRA's history.

What’s happening to the three directors?

Axiom Ince's former managing partner, Pragnesh Modhwadia, admits to using £64m from client accounts to fund the acquisitions of other law firms and to buy six properties of his own plus renovate another seven.

Modhwadia's assets are now frozen, meaning he can’t sell properties owned by companies controlled by him and his family.

The Metropolitan Police and the SRA are both still investigating Axiom Ince. But as of now, no arrests have been made by the police and none of the SRA’s allegations have been proven either.

What happens to the firm’s clients?

For the last few weeks, the firm had been ghosting its clients completely — reportedly not telling them anything.

Now, the firm’s website looks like this 👇

Clients are being told that they need to find another lawyer to act for them.

For now, the SRA has taken possession of all client documents, papers and money.

Who does this scandal affect?

Internal fraud like this destroys a firm financially. It ruins its reputation, client relationships and staff confidence.

The current situation is going to affect a lot of innocent people too — including the firm’s trainees, future trainees and business service staff who now face a lot of uncertainty.

In September, Colin Passmore, chair of the City of London Law Society, called on City firms to step in to help find trainees a new home.

Who’s to blame here?

Well, the allegations are against the three directors who acted badly.

But there are a lot of other unanswered questions:

1. How did £64m go missing without anyone noticing, especially if some of the money was used to acquire other law firms?

2. Why did no one question the source of the purchase funds in those law firm acquisitions?

3. What should the SRA have known?

Overall, this whole scandal doesn’t reflect well on the SRA or even the other firms in charge of the regulatory aspects of Ince Group’s sale to Axiom DWFM.

How does this impact law firms?

The misuse of client funds goes against the SRA Code of Conduct for solicitors and firms – specifically:

• Paragraph 1.2 — Solicitors and firms should not abuse their position and take unfair advantage of clients or others.

• Paragraph 4.2 — Firms must safeguard money and assets entrusted to them by clients and others.

The failings of Axiom Ince seem to be due to the directors who were acting badly.

But law firms could still take this as a warning sign to reflect on whether any changes to policies and procedures should be made to try to avoid something like this happening at their firm.

This might include:

• Limiting its dealings with client money (and using third parties to do that where possible).

• Conducting regular checks of its accounts to detect anything unusual.

• Providing regular training sessions for all staff on the importance of ethical handling of client funds and the consequences of misuse.

• Ensuring that responsibilities related to client funds are divided among different employees, so no single individual has control over all aspects of any changes in the account.

A BIT OF FUN 😄

😭 ok but WHY are we learning like this?

IN OTHER NEWS 🗞

• 📉 Global deal activity this year has only hit $2tn in merger and acquisition deals, the lowest since 2013. This is a 28% drop from the same time last year. Even though a few big deals made headlines in September, the overall trend isn't looking too rosy. This slowdown is bad news for corporate law firms, which earn a lot from advising on these deals. Why the slump? High interest rates are making borrowing expensive, especially for private equity firms that rely on cheap financing.

• 👡 Birkenstock, the iconic sandal company, is launching an IPO on the New York Stock Exchange, with the process being led by Kirkland & Ellis. But the market's been tough, with several companies seeing their share prices drop post-IPO. The challenge? A cost of living crisis has consumers prioritising essentials over shoes and clothing. They're planning to sell shares between $44 and $49, potentially raising $1.58bn.

• 🛍️ The FTC (the US competition regulator), along with 17 states, is suing Amazon, accusing it of being an illegal monopoly. The main beef? Amazon allegedly punished sellers for offering better prices elsewhere and strong-armed them into using its logistics and advertising services.

• 🤖 Simmons & Simmons is launching a six-person team dedicated to exploring generative AI. Diving deep into the world of AI, the firm has tapped Drew Winlaw to lead the charge. Winlaw co-founded the LegalTech company Wavelength and later joined Simmons & Simmons after the law firm acquired it.

AROUND THE WEB 🌐

• 📚️ Read: Check out the free Netflix for books and short stories (wait, isn’t that just a library?!)

• ❤️ Health: October is Breast Cancer Awareness Month, to raise awareness and learn more about its risks. Take this quiz - I’m sure you’ll learn something new.

• ⚽️ Sports (without the mansplaining): The GIST is a free sports newsletter led and written by women that covers the biggest headlines, including the social and cultural impact of sports. Sign up for free.*

Credit: r/internetisbeautiful

* This is sponsored content

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