Legal blog: all change please

This has to be one of the most exciting and challenging years to become president of the Forum of Insurance Lawyers.

The long-running Jackson consultation should finally translate into legislative changes affecting the insurance industry and related parts of the legal sector quite widely. Changes heralded in Lord Young’s Health & Safety Review will also come into effect and then the Legal Services Act could have a profound impact on the future shape of the legal sector, particularly firms with volume insurance practices.

My hope is that all of these events contribute to the roll out of a modern, robust structure that will finally address the ever-rising costs of litigation. Certainly from an initial meeting I have already had with justice minister Jonathan Djanogly MP, there is a clear sense that the MoJ and government are committed to significant reform and, so far, what they are contemplating seems to be sensible and workable. With support from the ABI working group, it is no longer a matter of ‘if’ but ‘when’ change arrives.

Change can be exhilarating for those prepared to step out of their comfort zone and this will be a year that demands change in practices from insurers and lawyers. Implementation of the Legal Services Act this October introduces alternative business structures (ABS) and the opportunity for organisations such as banks, supermarkets and even insurers to provide legal services either for the first time or on a much more significant scale than in the past. Expect to see the emergence going into 2012 of law firms that become much more service-focused as they join forces with new business partners.

ABSs come at a time when the Solicitors Regulation Authority (SRA) has also announced a move to outcomes-focused regulation (OFR) and various other reforms to the way in which practices are to be regulated.

I’m in favour of OFR in principle as long as the SRA establishes a sensible and achievable risk matrix. In any event, I think that law firms could face many months of uncertainty and confusion as they come to terms with the SRA’s future reporting requirements and how they capture the information required efficiently. This change in particular will go to the core of how firms are managed and what risk management procedures they have in place. It will not be just about delivering independent legal services but also about ensuring their practices are on a sound footing financially, with proper succession plans in place.

We must wait to see how all the developments mentioned here affect our individual business models. What is clear is that 2011 is likely to see enormous change in the way in which we conduct our business and we need to prepare for that change.

Tim Oliver is president of the Forum of Insurance Lawyers (Foil).