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Jane Holloway reports on how firms are coping with recent savage panel cutbacks.
For many firms, general liability is not a comfortable field in which to practise. With major composites such as CGU, RSA, Iron Trades and Axa sharply reducing their panels, insurers are making higher and higher demands on fewer and fewer law firms.
It is a sensitive issue for both law firm and client; no claims managers at any of the composites spoken to were willing to go on the record, but all agree that they are aiming for greater control and closer relationships.
Much of it is down to Woolf, of course. The challenging timetable that the new protocol requires means that case management systems are springing up everywhere.
"IT is completely changing the way that general liability cases are dealt with," says Paul Taylor, managing partner at Berrymans Lace Mawer, whose firm was quicker off the mark than most in developing its own "xplain" system.
But there are a lot of myths about general liability work, mostly revolving around the difficulty of turning a profit. Yet the leading general liability practices - named in the forthcoming Insider's Guide to Insurance and Reinsurance as Barlow Lyde & Gilbert, Beachcroft Wansbroughs, Berrymans Lace Mawer and Kennedys - are able to run a good business. What is more, the leverage ratio of partners to assistants is not unusually high, averaging around 1:3.
And although a number of major players in this area handle considerable amounts of work in the regions, with the London office handling high-value cases (think Dibb Lupton Alsop, Hammond Suddards, Eversheds), some pure London practices are nevertheless thriving.
A classic example is Barlow Lyde & Gilbert, which set up a general liability practice several years ago and which has grown to be one of the major players in this area. "Cost is not the be-all and end-all," argues Barlow Lyde partner Graham Dickinson, who is credited by one client with "revitalising the operation".
Allied to this is the change in market conditions.
Some law firms, such as Berrymans Lace Mawer, are reporting increases in rates from larger composites, and clients themselves are turning against a slash-and-burn approach.
"We don't want to deny law firms a profit," says a claims manager, "but we just resent paying for an obscene amount of profit."
After all, as another claims manager points out: "For the small number of claims that eventually do go to litigation you want the best.
"Sacrificing quality for lower fees is counterproductive, as the impact on damages could prove significantly more expensive."