Allianz Global Corporate & Specialty (AGCS) recently held its annual one-day conference at the British Museum for leading UK solicitors and their broker partners.
Many of the presentations at the event referenced the rate of consolidation occurring in the industry, with 41% of firms likely to be involved in a merger in the next 12 months. Among the factors fuelling M&A, the perceived threat to turnover was named as a primary driver in the need to be bigger. Other drivers include: recession, corporate failures, depressed property values, competitive pressures and for smaller firms PI premiums.
The Alternative Business Structure model (ABS), which removed existing restrictions on the ownership of law firms also featured heavily. ABS has given rise to entities such as the Co-operative Legal Services and Ian Peacock of Bond Pearce also cited the example of entrepreneur and television personality James Khan investing in a West Midlands firm to compete with the London heavyweights. He warned that the profession ignored ABS at its peril as it will change the way customer’s access legal services and pay for it.
Litigation was inevitably a topic of interest throughout and Angus Turner of Mills & Reeve cited social media as potential weapon against spurious litigants. One case, in which a girl apparently tried to claim for lost career earnings due to poor tuition from a university, was found to have written on Twitter “I don’t know why I am doing this course; I don’t even want to be a lawyer.”
David Cable, AGCS head of professional indemnity, rounded off by giving his outlook on what the profession could expect at renewal this year: “AGCS is very keen to renew any good quality firm but technical rating will apply. We will continue to underwrite each account on an individual basis and if a firm’s fees are up the premium will reflect this. However, ARP contributions will be reduced in light of the changes to the 2012/13 ARP.”