Lexcel 'can cut PI costs' - Professional Indemnity Insurance for Solicitors

01/09/2008

The Law Society has told solicitors that implementing its Lexcel framework could be one means through which their Professional Indemnity (PI) insurance costs could be reduced.

According to the professional body, research conducted in 2005 by the Independent Commissioner found that more than two-thirds of Lexcel-accredited legal firms had seen their PI premiums drop as a result.

In all, 69.1 per cent of the practices surveyed as part of the report had found accreditation to have a corresponding reducing effect on their insurance costs, the Law Society notes.

With the economy in general currently undergoing tightened conditions, the organisation recommends gaining Lexcel accreditation as a means for solicitors to cut their outgoings in the area of PI insurance cover.

Paul Marsh, president of the Law Society, says: "Anything which improves a firm's risk profile may be looked upon more favourably by insurers.

"Lexcel might be a factor in helping maintain current or potentially reducing future premium levels for solicitors."

By implementing the Lexcel framework across all areas of their operations, the Law Society claims that businesses can reduce their exposure to risk, as well as providing a better service to clients.

Mr Marsh comments that the findings of the Independent Commissioner indicate that insurers - as well as industry participants - view the qualification as being a "standard of excellence".

Firms looking to implement Lexcel may be interested to know that a new edition of the standard, version four, was introduced in 2007 to coincide with the revised Solicitors' Code of Conduct.

As well as helping legal practitioners to comply with the updated Code, the fourth version of Lexcel incorporates other regulatory issues and more general aspects of practice management.

In order to gain accreditation under the initiative, the Law Society advises solicitors that they will be expected to operate to the highest standards, as determined by an independent assessment process.

Beyond this, accredited firms are expected to liaise with their clients in order to determine how the experience of working with the practice is perceived by the individuals it serves.

The Law Society asserts that "continuous improvement" should be aimed for by all businesses which gain accreditation as part of an ongoing process.

Simpson Millar was the first law firm to gain Lexcel accreditation a decade ago, according to the professional body, with its performance having improved during the interim as a result.

Operations director Craig Jones explains: "The processes and procedures that Lexcel requires coupled with the discipline it imposes has led to a more uniform approach and increased standardisation throughout our business."

He adds that the company's PI insurers have consequently seen the firm as posing less of a risk - which he claims has been reflected in the PI insurance premiums demanded of the practice over the decade in which it has been accredited.

With the economy tightening across many industry sectors, the Law Society encourages solicitors to look to the standard as a means of cutting costs.

Mr March concludes that those who do not could ultimately discover that they are "missing a trick" when it comes to addressing their expenditure on PI insurance cover.

PYV are one of the UK's leading providers of professional indemnity insurance. This news article has been produced by Adfero in collaboration with PYV and its unauthorised use is not permitted.

(c) 2008 Adfero Ltd.

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