Risk management and professional indemnity survey 2013: Getting it Right

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Following successive years of regulatory change, including the introduction of outcomes-focused regulation, COLPs and COFAs, risk teams are now in a phase of assimilating those changes. Legal Business tracks progress so far

After five years of reporting on the torrent of regulatory change that has swept through law firms, this year’s Legal Business/Marsh risk management and professional indemnity survey finds risk managers within law firms looking to assimilate those changes. In our sixth annual report on the market, the buzzword is ‘embedding’ – ensuring the upheaval caused by the introduction of outcomes-focused regulation (OFR) and the new high-profile risk management roles (the compliance officer for legal practice (COLP) and the compliance officer for finance and administration (COFA)) are properly implemented.

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Risk Management and Professional Indemnity Survey 2012 – Treading Carefully

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In our fifth annual risk management and professional indemnity survey in association with Marsh, the world’s leading insurance broker and risk adviser, we analyse the latest trends in risk management, reveal the results of our far reaching survey and talk to the leading names in risk management at the City’s largest firms.

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Moving the Goalposts – Risk Management Survey Part 4

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Discussion over scrapping the single professional indemnity insurance renewal date and consigning the assigned risks pool to history has reignited. LB reassesses the state of play

In our report last year, it seemed that the debate over whether to move away from a single renewal date for law firms’ professional indemnity insurance (PII) had been settled. Insurers, brokers and risk advisers, such as Marsh, felt that it hadn’t been thought through properly. Risk managers at the top-150 law firms surveyed couldn’t see the benefits of staggering renewal dates. Even the Solicitors Regulation Authority (SRA) itself, after taking advice from various corners of the industry, declared the likelihood of scrapping the single renewal date for solicitors’ PII as ‘improbable’.

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Moving Targets – Risk Management Survey: Part 1

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2011 was always going to be a turbulent year, but the arrival of several new challenges has put risk teams under greater pressure than ever.

There’s never been a more important – or perhaps a more stressful – time to be a risk manager at a law firm. Previous Legal Business and Marsh risk management and professional indemnity reports have dealt with the need to properly establish a risk culture and gain effective buy-in from the wider firm in anticipation of major changes that were just around the corner.

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Staggering about

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There’s no doubt that there was a hardening of the professional indemnity (PI) insurance market in the past year for firms outside the LB100. The advantages of the soft market have truly come to an end. Many smaller firms have been hit hard by the hikes in premiums, due primarily to the rising number of claims within conveyancing, coupled with an increased chance of the firms failing, and the impact of fraudulent activity in the market.

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Finding a voice

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The reality for a number of firms is that up until now their risk teams have been wading through treacle to get their firms in shape. Now that the concept of effective risk management is universally recognised, the hard work begins for some: getting the appropriate level of support internally. To our survey question ‘What are the main barriers to implementing a risk management culture at your firm?’, the response ‘getting proper “buy-in” from fee-earners’ came up time and again. Continue reading “Finding a voice”

Putting out new fires

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This section looks at the key risks identified by the top 150 firms in the UK in our third risk management survey. While last year client bankruptcy, credit problems and other recession-related fears dominated risk managers’ agendas, this year some of those fears may have abated.

Of the potential risks identified by risk managers, the threat of clients being acquired or declared bankrupt has fallen sharply, scoring on average 2.6 out of five, compared to 3.6 last year (see ‘Legal risk profile’ table, opposite).

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