8 April 2002
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Philip Oldcorn is tired of lawyers who think his company takes work away from them. Oldcorn is legal and underwriting director of First Title, a company that offers a relatively new concept for the UK - title insurance for residential and commercial property. It is a product that has got up the Law Society's nose in the past due to fears that title insurance may replace conveyancers on residential transactions. Oldcorn, however, remains confident that his insurance is an additional safeguard rather than competition for property lawyers. In fact, he says: "We have spent the past seven years being told that we are a threat to lawyers, but we have spent that time sending lawyers business, hiring lawyers and paying lawyers' bills."
First Title was the UK's original title insurer, importing the US model pioneered by its 120-year-old US parent company First American Corporation. While title insurance is de rigueur in the US, there is a long way to go before it gains the same status in the UK.
However, First Title has made some headway in the UK, evidenced by the fact that its products are now also offered by established insurance companies such as Norwich Union and Countrywide. Last year, the company insured more than £1.5bn of mortgages. In addition to lenders and corporate clients, the company has in excess of 1,000 property lawyers - from the magic circle to sole practitioners - on its books.
Oldcorn's love affair with title insurance started on a golf course in Hertfordshire in 1995. He was playing with First Title managing director and founder David Thorpe when Thorpe asked if he was interested in setting up a UK subsidiary of First American Corporation. At the time Oldcorn was a solicitor at Michael Cann, a West End law firm, but thought it was a good time to move over to an in-house role.
"It was never my plan to practise permanently," he recalls. "I always thought that it was a real shame when you put together a deal and then others went off to make a success of it."
Oldcorn has a dual role because he oversees both the underwriting and the legal needs of First Title. He has 11 lawyers in offices across the UK reporting to him. There are teams established in Glasgow, London (where Oldcorn is based), Bromley in Kent, and another lawyer will be appointed soon for Ireland.
First Title will provide insurance in any European jurisdiction, but the bulk of the company's work is currently in the UK and Eire, so it makes sense to have its lawyers based there. The company has made its own market in the UK and Southern Ireland, but may add more offices as the market expands, with a Paris office currently under consideration. Further expansion could come if insurance for Central and Eastern European countries is handled through the UK rather than US underwriting centres. Many of the lawyers also do underwriting, put deals together and develop the business.
Legally qualified underwriters are crucial, according to Oldcorn, because "our clients want to deal with lawyers, not a clerk". He believes the split role makes things more interesting, plus it means that lawyers can help the company grow, rather than being a cost. However, Oldcorn concedes that it does take a particular mindset to succeed in such a role. "As lawyers, it is drummed into us that we have to avoid risk for our clients. As an insurance company, it is our job to take on risk. You have to move from being risk adverse to risk assuming."
Not all the in-house lawyers are underwriters; some concentrate on corporate or conveyancing work and First Title also has an in-house litigator. All the corporate work that involves First Title contracting with its customers is handled in-house because it is too unusual and complex to be handed to external firms.
However, a variety of other work is outsourced to external law firms. There is no formal panel at First Title, although Oldcorn may well implement one as the company matures. For the moment it's a question of horses for courses. As Oldcorn says: "I would never rule out any firm. I pick the best in the field for what we need at the time."
For those firms willing to sleep with the enemy, there is plenty of work to be had from the company. In the past, First Title has used White & Case, Gordon Brough and the City Law Partnership for M&A work; Wessing in Germany; Fox Williams and DMH for employment; and Cobbetts and Berwin Leighton Paisner for claims work. Barnetts has handled regional work north of the border.
While a general panel has yet to be introduced, First Title has set up a specialist insurance referral panel to which the company outsources bulk due diligence work. The panel has been set up to work on a product designed by Oldcorn and Nigel Heilpern, a partner at US firm Paul Hastings Janofsky & Walker. For deals involving large property portfolios, First Title will provide due diligence in tandem with insurance for title problems the lawyers cannot resolve, with panel firms handling high volume conveyancing work on the deals.
Some lawyers may feel that this is a threat to the profession, but breaking the picket line are Boyds, Halliwell Landau, MacRoberts and Mills & Reeve, which have all joined the panel. Law firms such as Paul Hastings will benefit as clients of First Title because they will be able to handle high-value property transactions without the in-house capacity to do bulk conveyancing work.
When he has finished launching new products for First Title, Oldcorn suspects that his own future will lie inside the company, but that he will be kicked upstairs into a purely management role. As to his vision of First Title's future, he says: "In seven years time, I'd like commercial and residential lawyers to be arranging title insurance on every deal, not just the problematic ones."
Oldcorn maintains emphatically that this will not undermine the role of the lawyers should it come to pass, pointing out that First American Corporation has provided title insurance in the US for 120 years and that lawyers are hardly a dying breed there. He claims that title insurance could benefit lawyers immensely if widely adopted because it would reduce lawyers' liability in a country where 60 per cent of Solicitors' Indemnity Fund spend is on conveyancing suits.
Oldcorn is so convinced of the benefits of title insurance that he has offered a magnum of champagne to anyone who can give a concrete example of how his product has harmed the legal profession - answers on a postcard please to The Lawyer.
Legal and underwriting director
|Employees||220 in Europe|
|Legal Capability||11 qualified lawyers and 12 support staff|
|Legal and underwriting director||Philip Oldcorn|
|Reporting to||Managing director David Thorpe|
|Main location for lawyers||London|
|Main law firms||White & Case, Barnetts, Cobbetts, City Law Partnership, Wessing, Fox Williams, DMH, Davenport Lyons, Berwin Leighton Paisner|