Small law firms 'face extinction' over insurance
Small law firms in the West Midlands are at risk of “being driven out of business”, according to the Birmingham Law Society. A survey of the society’s members revealed that sole professionals faced a steep increase in insurance premiums this year.
In contrast, larger firms fared “much better”, said the society. Within larger firms, insurance premiums rose by an average of less than 10 per cent, with some firms securing a discount.
Law firms are required to take out professional indemnity (PI) insurance to cover any negligence claims brought against them by clients.
Dean Parnell, president of Birmingham Law Society, said: “For some years the gulf between small and large firms has been widening. However, it has now become cavernous.”
Parnell predicts there will be greater consolidation in the profession as a result, with many high street firms having to give careful consideration to some of their practice areas.
Worcestershire practice Brownings Solicitors went into administration earlier this year, citing its £100,000 PI bill as one of the reasons. It was acquired by Solihull firm Harris Cooper Walsh.
