The law firm partnership model delivers a good ethical record, but leaves problems hard to detect

If proof was needed that old-fashioned partnership culture is alive and well in the City despite waves of partner culls and de-equitisations, then look no further than the case of Hogan Lovells' litigator Christopher Grierson and his alleged £1m expenses scam.

Previously best known for working on the epic Bank of England/BCCI creditors dispute, his name will now forever be linked in legal circles with the shocking achievement of wrongfully claiming more than £1m in expenses over a four-year period, according to his former firm.

While no-one is suggesting that problems of this level are widespread among the City legal community (although news has subsequently broken that former Ince & Co partner Andrew Iyer is being investigated by the police for alleged fraud while former Addleshaw Goddard partner Mark Gilbert also faces a Solicitors Regulation Authority (SRA) investigation for alleged discrepancies relating to expenses), there will be more than a few firms checking their own financial control procedures to work out if the same thing could happen to them. Because a large part of the reason that the situation with Grierson went undiscovered for so long is down to partnership culture and values.

As a senior partner at Hogan Lovells and legacy Lovells, Grierson was able to bypass the firm's travel agency, his secretary and the corporate credit card – booking his own tickets for travel on his own cards, subsequently allegedly cancelling the flights but still claiming the money (roughly equivalent to £5,000 a week) back.

This is something a junior lawyer or administrator would never have been able to do – not least because their movements would be tracked. By supposedly making expenses claims against client matters, Grierson was able both to self-certify his own claim and then ensure the client was never billed. Speak to many partners and they will suggest it could never happen at their firm. While self-certification of expenses does happen, there's a cap (often at around £1,000) after which expenses need to be signed by someone like a practice head.

But while Legal Week research this week found a high degree of confidence about City law firms' financial monitoring, governance and the general ethical standards of partners, the reality is that it could probably happen elsewhere. Just ask Hogan Lovells or, indeed, Ince.

As one professional indemnity specialist comments: "This [Grierson's case] has come as a massive shock but it must serve as a wake-up call to firms that they need to ensure they have proper systems in place, as many don't. Something like expenses fraud could happen with any partner who is travelling a lot."

Ironically, the same partnership culture and values may also save Grierson from facing up to the harsher realities of his actions. To date, while Hogan Lovells has referred the case to the SRA and Grierson is ultimately likely to go before the Solicitors Disciplinary Tribunal, the firm has yet to decide whether to refer the case to the police.

This means that while he faces the likelihood of being struck off and forced to pay costs (at an estimated £10,000, they would be unlikely to hurt a man who has promised to pay back £1m), he should be spared jail, despite the sums involved. That is partly due to the fact that client money was not lost, but it is interesting that Legal Week's research finds that a majority of partners believe such matters should be first handled by the police.

Unfortunately for Iyer, partner loyalty perhaps does not run as deep at Ince, as the Metropolitan Police investigation of his activities is already well underway.


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