In the City: Edward Fennell
September 1 2011 12:00AM
If professional indemnity insurance continues rising, this autumn might mark the end of an era for the tiddly firm
Season’s greetings
As we swing into the new season here is something for City lawyers to reflect upon.
With “Tesco law” looming large, things were already looking grim for their country and suburban cousins. But even more immediately grave, says the network High Street Lawyer, is the threat posed by soaring professional indemnity insurance.
“Hundreds of Britain’s 10,000 solicitors’ firms may be uninsurable and will be forced to cease trading or make other arrangements in the next 12 months,” the network says.
At the heart of the problem are the micro firms with five partners or fewer. If they have a claim against them on their record they will typically be facing insurance premiums of about £50,000. The danger, High Street Lawyer says, is that at this level the costs could prove to be prohibitively expensive.
Some solicitors may just give up. For those who want to soldier on, the answer could be to look for a merger partner. But, either way, this autumn might mark the end of an era for the tiddly firm. Small may still be beautiful but, sadly, it has become unaffordable.
This article first appeared in The Times on 1 September. Whilst there are massive difficulties for small law firms, and PI insurance is just one of them, HighStreetLawyer.com has solutions. If you are a small, local, entreprenerial law firm then get in contact to see how we can help.
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