Number of sole practitioners has dropped by 5% in the past six months alone
A rise in professional indemnity insurance (“PII”) premiums is driving independent legal practitioners to become consultants for larger firms in increasing numbers, according to Taylor Rose MW, the fast-growing and innovative UK law firm.
Taylor Rose MW recently revealed it has more than doubled the number of consultant solicitors in its legal consultancy division within the past year, with its growth momentum helped by an increased acceptance of home working since the pandemic.
It says this growth is being further fuelled by the pressure on smaller firms and sole practitioners over increasing PII premiums. A recent report1 from Lexis Nexis revealed that PII has increased by an average of 30% amongst SME firms, with two-thirds of respondents saying the cost of PII was among the biggest threats to their firm. Further research from Mazars2 suggested that closures of law firms over failures to obtain insurance have increased sixfold in five years.
Insurers are becoming more risk-averse in areas such as conveyancing and have been pushing up premiums to cover potentially high payouts. The increased number of solicitors working from home since Covid has also increased risk for insurers, particularly for those working in smaller firms without well-established risk, compliance and quality control processes.
Taylor Rose MW says this is making life very difficult for startups and sole practitioners. Its analysis3 reveals that the number of sole practitioners regulated by the SRA has dropped by 5% in the past 6 months alone.
Adrian Jaggard, CEO, Taylor Rose MW, explained: “Increasing PII premiums have particularly impacted smaller firms and sole practitioners and it is having a marked impact on their appetite to keep operating independently. We are seeing a lot of experienced solicitors who no longer want the responsibilities of compliance and increasing operating costs, and instead are seeking the relative security and freedom of operating as consultants. This is certainly a contributing factor to the fast growth of our consultancy division.”
Taylor Rose MW’s consultant solicitor platform is one of the top four in the UK, and number one in the property sector and in consumer law. Its consultants enjoy multiple benefits, including a referral network, marketing support, a recognised brand, sophisticated IT support and systems, professional indemnity insurance and compliance support, as well as the low operating costs of working from home.
1 Lexis Nexis, Bellwether 2021: The good, the bad and the new The Bellwether Report 2021 | LexisNexis
2 As reported in The Times on 17/12/21 Dozens of law firms close as cost of indemnity cover rises | Business | The Times
3 Analysis of data from the Solicitors Regulation Authority, comparing May and November 2021, the latest data available SRA | Regulated population statistics | Solicitors Regulation Authority
About Taylor Rose MW
Founded in 2009 as Taylor Rose Law, the business has successfully undertaken several mergers with the likes of Tucker Turner Kingsley Wood and McMillan Williams Solicitors. It currently has around 500 employees and 350 fee-earning consultants, generating revenues of £70m in the year ending September 2021.
Primarily focused on consumer law, Taylor Rose MW operates in sectors including property, where it is a top three UK conveyancer; private client; family; and criminal law.
At the forefront of market disruption in UK legal services, Taylor Rose MW also operates a fast-growing top four UK consultant solicitor platform, which is number one in the property sector and in consumer law.