A majority of law firms are expecting the cost of risk management to rise. So says insurer Travelers, whose recent research into the sector suggets that over 85% of law firms are expecting a price hike.
The report also revealed a wide difference in risk-related spending. Costs associated with risk management and other compliance issues at surveyed law firms ranged from £150,000 to £3.3m.
Results from the Travelers Top 100 Solicitors Survey, conducted among leading UK law firms in April and May 2011, also found that 86% of law firms surveyed were actively pursuing a firm-wide risk management strategy. Yet just 45% said they were actively pursuing a process to identify and manage the most common errors.
John Kunzler, senior product manager, professions at Travelers, comments: “It is encouraging to see that solicitors are familiar with the risks that face their firms and individual partners. However, there is still some progress to be made by firms to ensure they have the correct risk management procedures and coverage in place. The huge divergence of costs associated with risk management is also something that law firms can address with their insurer.”
Travelers also suggests that respondents valued communication, with a clear explanation of the retainer (the scope of work between the lawyer and his/her client). In addition, 59% of respondents rated policy cover as the most important aspect they consider with regard to buying solicitors PI, while 64% of respondents said the financial strength of their insurer was either important or highly important. However, less than 35% of law firms rated risk management services as highly important to their choice of insurer.
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