You are here

Virtual law firm unveils new compliance toolkit for smaller practices

14 April 2011

The founders of one of the first virtual law firms have designed a new toolkit aimed at helping smaller firms comply with the new SRA handbook and secure cheaper professional indemnity premiums, Solicitors Journal can reveal.

“Small firms and sole practitioners have problems with PII because they’re seen as high risk by insurance companies,” said Lucy Scott-Moncrieff about the launch of Surelaw.

“That’s not because they are bent or incompetent but because as small firms they are more unlikely to have somebody to deal with risk and compliance, which insurers view with greater suspicion.”

Scott-Moncrieff set up Scott-Moncrieff Harbour and Sinclair as a virtual firm in the late 1980s, primarily handling legal aid cases.

The firm, now know as Scott-Moncrieff and Associates – or Scomo – since the retirement of Anthony Harbour earlier this month, operates from a small base in London providing centralised admin support to a number of solicitors working independently within the network.

Benefits include access to lower PII premiums negotiated at network level.

“The same principle underpins the Surelaw scheme,” Scott-Moncrieff continues. “It is about taking the regulatory and compliance burden off the shoulders of individual members.”

Joining the scheme will involve preliminary vetting by Surelaw’s brokers, Hera Indemnity, and an audit by Surelaw reviewing the applicant’s risk assessment and management systems.

The initial audit is priced between £1,000 and £1,500. Thereafter an annual membership package will be payable based on the firm’s turnover: from 2.5 per cent of turnover for firms with a turnover below £500,000 (with a minimum of £5,000) to one per cent of turnover for firms with a turnover above £2m.

Asked whether small firms would not find membership costs too expensive, Scott-Moncrieff said it should far outweigh the cost of the insurance premium obtained outside the scheme.

“We were contacted by a firm which currently has an annual premium of £37,000,” Scott-Moncrieff said. “After speaking to our broker, the same firm through Surelaw would see its premium drop to below £15,000.”

The scheme is set to go live as soon as the SRA has finalised the new rules on minimum terms and conditions of professional indemnity insurance, which the regulator has confirmed would be in the next few days.

Surelaw’s team will include Scomo’s current audit manager who will move across to the new business and regulatory lawyers.

It will also include a former Lexcel auditor but Scott-Moncrieff said unlike Lexcel the new scheme was risk-based and primarily geared at addressing insurance-related issues.

She added the scheme would be part of a number of accredited schemes that would help lawyers compete more effectively in the forthcoming ABS world.

While not a scheme along the lines of QualitySolicitors, there is no reason why Surelaw could not be used as a badge of quality if members were interested and this could be a point to explore further, Scott-Moncrieff said.

Categorised in:

Legal Aid