[1]Johnson: mutual is “better model” for indemnity insurance
A law firm set up by Mark Johnson, a solicitor and former partner at Geldards, is among the first dozen entities to be named today as regulated by the Bar Standards Board (BSB).
Mr Johnson, who is not an advocate, was managing director of London alternative business structure TPP Law before it was bought by Geldards [2] in 2013.
After leaving the regional firm earlier this year, Mr Johnson said his new, BSB-regulated firm, Elderflower Legal would combine commercial services with consultancy advice for charities, not-for-profit bodies and SMEs. It is the only one of the new entities not granted full rights of audience.
He told Legal Futures that he wanted Elderflower Legal to be regulated by the BSB rather than the Solicitors Regulation Authority (SRA) because of access to Bar Mutual indemnity insurance and the Bar’s “simpler and more transparent” rules.
“They have one handbook, which is relatively easy to read, compared to volumes and volumes of SRA material you need to be aware of – most of which is over the top for a small business.”
Mr Johnson described the solicitors’ insurance market as “turbulent” and said the way insurance was offered was “shrouded in mystery”, with the risk that insurers could substantially increase premiums or pull out altogether.
“The mutual is a better model because all the insured practices are in one place, ensuring stability from one year to the next.”
Mr Johnson said the BSB had been progressive in seeing the way the market was moving and introducing an element of innovation. “It’s about choosing a regulatory model that is proportionate and value for money.”
Westminster Law Chambers, based in London’s East End, is the only entity in the first batch to employ more than one barrister – in this case two.
Ahmed Malik, the head of practice, said becoming an entity would give him more flexibility to employ solicitors and barristers from other practices.
He said the firm, which covers general civil and commercial work, was “looking to expand”.
Paul Dipré, barrister at Clerksroom, said the reason he set up a law firm was to save “a few thousand pounds a year” in tax.
Mr Dipre, who specialises in family and commercial work, said that as an employee of an entity, national insurance and other contributions could be significantly reduced.
“My accountant said it was far more tax-efficient,” he said. “This gives me a little more money to play with – to renew my library and maintain computers.”
Also in the first wave of entities is SG QC Ltd, owned by Simon Gorton QC of Atlantic Chambers in Liverpool.