If you ask an insurer what the three biggest risks are when providing cover to a law firm they will likely respond with ‘conveyancing, conveyancing and conveyancing’. An ever-increasing market pressure on price and a push towards high-volume, low-margin workloads in an extremely competitive market are doing nothing to reduce a law firm’s exposure to risk. Professional Indemnity Insurance (PII) is probably a firm’s biggest cost after salaries, and reports indicate that sole practitioners are paying around 7 per cent of turnover.
The Solicitors Regulation Authority (SRA) suggests that property represents a disproportionate level of negligence and that residential conveyancing accounts for 26 per cent of indemnity payouts, with one of the root causes being lack of adequate risk management.
The big question is what steps can you take to mitigate risk as a modern forward-thinking firm whilst increasing efficiencies and remaining competitive? Here is some advice for a law firm on how to reduce risk: