When insurer Iron Trades decided to restructure its panel last year, it knew it was not going to be a simple operation. After all, when you have no in-house department and you outsource to more than 50 firms, any shake-up has the potential to become very messy indeed.
Some of the firms had been with Iron Trades for as much as 50 years, and saying goodbye was not going to be easy. So Berrymans Lace Mawer and Jacksons – instructed by Iron Trades to help manage the process – developed a two-stage plan that, according to claims director Ashton West, needed to be handled “as objectively as possible”.
West says: “We tried to take out personal relationships. It is an important aspect but cannot be the main feature. You’ve got to be very professional, very commercial and very objective.”
West asked the firms to provide in-depth details on a variety of areas. This included information about financial stability, key services, costs and charging structures, training and technology and communications strategies. He also asked his claims managers to offer their own opinion on the firms. “We didn’t want to ignore the subjective assessment of our own people,” says West.
With just over 20 firms left after this initial trimming down, it was then time to find a final group who could handle the high volume of work that the company produces and also keep up with the technological advances that Iron Trades embraces.
For this reason, prospective law firms had to be systems driven. With as many as 30,000 liability claims outstanding at any one time, the firms would need the expertise and IT infrastructure to turn around the large caseloads in as short a time as possible. At the same time, the more meritorious claims had to be given priority.
West believes that technological advances are creeping into all areas of business and industry, not least legal firms and the judiciary.
“Wherever we are, I firmly believe that this will be the key to the future of the legal profession in this area,” he says. “The Lord Chancellor’s Department recently posed the question, is the court a place or is it a process? That process does not have to take place with all parties in one location. The legal profession needs to move in tune with that, as do we in insurance.”
Previously, lawyers were chosen by regional managers, which often led to distribution becoming “skewed”. Some firms had more work than they could handle, while others were left twiddling their thumbs. But thanks to the possibilities of non-location specific systems, this was rectified with relative ease.
West says: “We control the provision of work. We have a central control to ensure that there is this balance in the distribution.”
At the end of the second stage the panel had been reduced to a svelte little party of 12, which took into account the advantages of national and regional firms. At national level, Berrymans Lace Mawer and Vizards Staples & Bannisters took pride of place, with Simpson & Marwick flying the flag for Scotland and C&H Jefferson representing Northern Ireland. The regions were represented by such well-regarded firms as Cartwrights Adams & Black, Ensor Byfield and Peter Rickson and Partners. Unsurprisingly absent from the 12 was the presence of any magic circle or even top 20 firm.
West says: “We wanted a combination of national and local coverage and we were keen to get the best of both worlds. We wanted one large, nationally well known, high profile firm. If we had just gone for those [top 20 firms] we would have lost the benefits of some high quality local providers who were much less expensive, but still of the same quality as the larger firms.”
West’s panel of 12 is more cost-effective and, he believes, as efficient as a panel of two or three major national players. But even with such a large amount of skill and knowledge at his disposal, he still looks further afield when he needs that little bit extra.
Some of the company’s larger customers ask for firms such as Beachcroft Wansbroughs, and West is only happy to arrange this.
During the golden days of British shipbuilding, Iron Trades was the major insurer of shipyards, and a legacy of this is long-running Asbestos cases. At the time, it used Scottish firm Biggart Baillie whose close relationship with employers gave it access to information invaluable in this area. This is the reason why it retains its expertise.
West says: “It has got a knowledge base in that specific area relating to the policy holders. To transfer it to a member of the core panel would not have been a cost-effective move.”
While West and his firm appear to have a hard-nosed approach to the cut-throat world of business, there is an underlying philosophy of excellence and evolving customer care which drives everything they do. West wants his choice of legal firms to resonate with this.
“We want our own mission statement to be reflected in the attitudes and philosophies of the firms we are using. We want to have a common aim and a shared philosophy on claims resolution,” he says. “Only by getting to know people can we share the same vision.”
West’s vision is one of evolution and constant change. The firm, which claims it was the first to offer its customers total web-based control over their policies, thinks it is technology that will either make or break businesses.
“You’ve got to keep looking to the future,” he warns. “Shape your thinking towards it, otherwise you’ll get left behind.”
|Claims director||Ashton West|
|Reporting to||Steven Price, general manager of the major risks division at QBE Europe|
|Main law firms||Berrymans Lace Mawer, Cartwrights Adams & Black, C&H Jefferson, Ensor Byfield, Everatt & Company, Grindeys, Jacksons, Peter Rickson and Partners, Simpson & Marwick, Vizards Staples & Bannisters, Weightmans, Whitfield Hallam Goodall|