Law firm innovator takes practice forward as unregulated firm

Stephenson: Same level of support for clients

Law firm innovator Alice Stephenson has turned her business into an unregulated practice, citing problems with HM Revenue & Customs (HMRC) and the costs of running a regulated law firm.

Bristol-firm Stephenson Law entered a creditors voluntary liquidation last month and she is now operating through Plume.

It continues to handle commercial and corporate work, with a particular focus on technology businesses, and offers a range of subscription services alongside one-off advice.

It has 12 staff, with the solicitors still regulated individually by the Solicitors Regulation Authority. The ability for solicitors to practise from unregulated organisations and advise third-party clients rather than just their employer was introduced in 2019.

A statement on the Plume website said: “The company ceased trading in October and there were no employees, clients or client money in the business at the point of liquidation.

“Whilst there are some creditors, a significant portion of the debt comprises inter-company loans and we are working alongside the appointed liquidators, Mazars, to maximise the return to the other creditors.”

According to the statement of affairs posted on Companies House, the firm has debts of £1.6m, of which £820,000 is owed to HMRC in unpaid VAT and PAYE.

Writing on LinkedIn, Ms Stephenson clarified: “We owed a large amount to HMRC which we were paying back every month, but HMRC chose to call the whole debt in, which forced us into liquidation… A third of the debt is owed to my other companies.”

The website statement noted that “running a regulated law firm comes with a unique set of challenges, the most notable one being the requirement to maintain a very specific professional indemnity policy which meets the SRA’s minimum terms”.

This cost Stephenson Law nearly 7% of revenue at its last renewal, despite having no claims history. “When you consider that top law firms are proportionately paying 4x less in their PII premiums, it’s clear that there’s a systemic issue at play.

“In 2022 we made the decision to wind down our regulated activities and focus on operating as an unregulated law firm, Plume. All our solicitors remain regulated by the SRA, but without the associated costs of firm regulation.

“This enables us to provide the same level of support and quality of advice to our clients without being encumbered by the burden and expense of SRA regulation which would inevitably need to be factored into our pricing, and this is not a cost we feel should be borne by our clients.”

Ms Stephenson said Plume was “financially stable and completely unaffected by the liquidation… It’s business as usual”.

She added: “I’ve made mistakes, and I’m always the first one to acknowledge them. I don’t understand why some people take joy from other people’s failures, particularly in the legal industry, but it makes it a very off-putting place to try and effect change, which has always been my mission.”

Since its launch in 2017, Stephenson Law was avowedly an ‘alternative’ provider of legal services, with the solicitor describing its culture as more akin to a fast-growth tech company than a long-established law firm.

In 2021, she was among the 40 winners of Innovate UK’s Women in Innovation awards, for which she received a £50,000 cash prize plus mentoring and other support.

Ms Stephenson has worked to build a strong personal brand, offering a course on how to start a law firm for £499, £300-an-hour consultancy for law firm owners, creating Lawscape, a “peer-to-peer community for leaders of the next-generation law firms”, and recently publishing a book about her life, (Out)Law: From Teenage Mum to Legal Trailblazer.

    Readers Comments

  • n/a says:

    This article is a disgrace. Describing very serious financial mismanagement as “taking practice forward”. No mention of the £666k directors’ loan. I could go on.

  • David Ford says:

    The Professional Indemnity Insurance which she lambasts is to protect the public from idiots like this. Please go back to your tattoo parlour and leave the law to those who actually care about professional standards

  • Carlos The Jackal KC says:

    This article (together with John Hyde’s on Law Society Gazette of the same date and virtually identical content and tone), is clearly paid-for content (or at least a special friends request) by Alice in an attempt to spin the story and limit the damage to her precious “personal brand” (aka far-left woke cult of personality) after Roll On Friday and Legal Cheek exposed the truth about the failure of Stephensons Law in sharp contrast to the public image of success Alice was promoting. At least Legal Futures have allowed comments on the article, unlike the Gazette who have turned them off!

    Alice almost certainly is not “taking her legal business forward” by transforming it into the unregulated legal services model. She has apparently set up a “phoenix company” outside the onerous SRA regulatory framework to escape the massive debts her failed law firm accrued in a very short space of time. That a director of a small company can owe £100Ks both on their loan account and HMRC in unpaid tax after barely five years of trading is deeply concerning and warrants investigation by the regulator.

    Legal Futures, hang your head in shame! Are you reporting on the news of the legal profession, or are you doing Alastair Campbell-style favours for friends in saving their public reputations?

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