Taylor: Legal industry is suffering
A legal business that uniquely runs both a regulated and unregulated practice says a 220% increase in the cost of the former’s professional indemnity insurance (PII) justifies the way it operates.
The 360 Law Group is increasing its standard hourly rate by 10% to £220 as a result for regulated work, but maintaining a rate of £155 for unregulated matters.
The virtual practice explicitly offers clients a regulated law firm, an alternative business structure called 360 Law Services [1], to handle reserved legal work, and an unregulated firm, 360 Business Law, for everything else.
Since last year, it also operates in the USA [2] as 360 Business Law America.
The ABS has seen its premium leap from £15,000 to nearly £60,000, even though its turnover only increased by 74%.
Group chief executive Robert Taylor argued that the Solicitors Regulation Authority has effectively ceded control of law firms to the insurance market.
He said insurers cited fewer players in the market, increased claims and the pandemic for increasing premiums. They also struggled to understand the virtual model it operates.
“Therefore, 360 Law Group has decided that whilst it will not increase the fees of its unregulated practice, fees for the regulated practice will increase from £200 to £220 per hour.”
Mr Taylor said the legal industry was “suffering”. He explained: “The combination of decreasing revenues and unprecedented increases in insurance premiums, have forced a significant number of smaller practices to cease trading, as they simply cannot afford to continue operating profitably.
“Others have had no other option than to increase their hourly rates simply to stand still, meaning that once again, businesses and consumers are picking up the bill.”
At the same time, he stressed the value of having a regulated practice, which he said “delivers considerable assurance” to smaller business and consumer clients.
“However, for our larger corporate clients, PII coverage is simply unnecessary. They are serviced via our unregulated side of the business but work with the same highly qualified lawyers available via our regulated entity.
“We refuse to be manipulated by the insurance companies who are profiteering from the current situation. Through our unregulated services, we can remain in full control of our business and maintain our low fees for the benefit of our clients.”
The firm quoted Peter Wright, president and CEO of Eikon Group, a digital mastering and localisation business for the film industry that uses the unregulated firm, who said: “We certainly do not need the added costs associated with the gold-plated PII.”
The group has over 300 lawyers in more than 65 countries working as consultants.