The Taylor report
26 July 1999
Sitting on Paul Taylor's desk in Berrymans Lace Mawer's office inSalisbury House is a
confidential dossier containing his "four point plan"for transforming the firm into a
national player.The masterplan documents are headed "current", "previous" and
"hybrid".They reveal the changing fortunes of the firm and the future strategy
ofclient-led expansion.The firm, created after the merger of Berrymans and Lace Mawer
in 1997, iscurrently in merger talks with Davies Arnold Cooper (DAC), revealed by
TheLawyer (12 July), and north eastern firm Linsley & Mortime (The Lawyer, 21June). It
also has partners scouting around the south west to find anotherpractice to absorb into
what Taylor hopes will become an empire ofinsurance litigation firms.Taylor is in no
doubt that his plan to focus on national expansion isright and claims that his strategy
not only focuses on expansion by mergerbut also on organic growth.And Berrymans is
certainly growing. Turnover in 1991 was £2m. Last year the merged firm generated £36m.
Staff numbers in 1997 for Berrymans andLace Mawer combined were 500. Now they are more
than 700. And the firmhandles 25,000 cases a year now compared with a combined total of
1,500 in1997.Taylor is not only looking at merging across the country but also at
thedevelopment of his firm's offices in each region."There are areas of Berrymans that
need to be strengthened. We need toreinforce our presence in Birmingham. It is an
expanding city and ouroffice there is small. We are looking at lots of possible options
to getbigger there," he says, but declines to go into details of exactly how.Berrymans
is heavily dependent on the insurance industry. More than 70 percent of its work is
insurance litigation. The rest of its practice is takenup mainly with niche work done
for insurance companies."Since 1991 Berrymans expected the insurance market to
consolidate. Wedecided then to merge nationally and our prediction rang true,"
Taylorsays. In 1991 Sun Alliance, Commercial Union, General Accident (GA) andGuardian
Royal Exchange (GRE) were Berrymans' big clients. Since then Royaland Sun Alliance have
merged, Commercial Union and GA have merged, and GREwas acquired by French insurers AXA.
"Not one of our major clients hasstayed the same. All of these companies want national
coverage," he says.Taylor is putting his faith in developing national coverage, but
otherinsurance firms disagree with Taylor's views on the insurance market andhow to
adapt to changes within it.Nick Thomas, senior partner at London-based insurance
litigation firmKennedys, thinks Taylor interprets too narrowly the way the legal
insurancelitigation market is developing."There are two types of insurance litigations,"
he says. "The first is lowvalue work that gives a high return. That is what Berrymans
does. It can bespread over the whole country because it is smaller and less
specialisedthan the cases we deal with."The second is based around the London insurance
market. It is large scalespecialised work that pays more. That is what we do."He adds:
"This whole country is London-centric. It would make nodifference to us if we had a
regional office. All our work is drawn back toLondon. We travel all over the place, but
London is where our specialistservice lies."I think Paul has the right strategy for
Berrymans, but it does not applyto all insurance litigators."In particular, Thomas
doubts whether a merger between Berrymans and DACwould work because he thinks the two
firms handle very different types ofcases."I would query whether you can get a
homogenised firm from a merger. Ifthe DAC merger does work, Berrymans will inherit more
of our kind ofbusiness from DAC. But then it will have to relocate the majority of
itswork to London. That would affect its strategy of being a national firm."Jonathan
Lewis, chief executive at DJ Freeman, also has doubts aboutBerrymans' strategy. He says:
"It depends on the type of insurance work youare doing. There are different types. We
are involved with corporatefinance insurance and Lloyd's-type work, which are big
claims. Our head ofinsurance is working in Bermuda at the moment. I don't think having
anational presence would help his work much."If you have a practice like Berrymans,
which is based on a large numberof claims, then a national strategy may work. But it is
not relevant tous."Berrymans has successfully avoided the round of culls of insurance
panelswhich have taken place in recent months. But some believe that a mergerwith DAC
could herald the end of the firm's good relationships withinsurance companies.Experts
say insurers may see it as a merger too far because many arecutting the number of their
legal advisers, while Berrymans is, in effect,bringing firms that insurers rejected back
onto the panels. Some go so faras to say that Berrymans is sweeping up their
cast-offs.Insiders say Iron Trades, along with other clients, may review
Berrymans'status as adviser if the DAC merger goes through.Rivals also doubt how a
Berrymans-DAC merger would work. "A DAC merger maywork. It also does a lot of high
turnover claims, but I don't think itwould gel that well for the more high-quality
Lloyd's type work, which italso does," says Lewis.Taylor admits that the cuts are far
from over."More panel cuts are on their way. Insurance companies have already saidso.
Fees have fallen so low that some firms are handling work at a loss,and they are set to
be reduced further." He even believes that if feescontinue to fall it may not be worth
some firms continuing to practise.Inevitably, the Woolf reforms will have a serious
impact too. "Cases willbe settled earlier because of mediation, the reduction of red
tape, and themulti-track system. So there is going to be less litigation. This will
makeit easier for people to claim, so it will be more attractive. But I don'texpect
there will ever be as many [litigation] cases for lawyers everagain," saysTaylor.Taylor
believes insurance litigation firms need a new strategy. And, nevershort of an answer,
Taylor has formulated one for Berrymans - hisfour-point plan.Berrymans is putting in
place a delegated handling scheme designed to cutclient fees by taking case files in
bundles rather than individually andnot reporting back to the insurance company until
the litigation iscompleted. The idea is to cut bureaucracy and so costs.Berrymans is
also offering insurance companies whole in-house teams whichTaylor argues will give the
firm a stronger hold over clients and lump sumfees to clients so they can purchase cut
price legal advice in bulk.The firm is also developing a total claims service where it
offers a spectrum of legal services ranging from pre-litigation to the settlement of a
case."No insurer has accepted pre-litigation advice from an outside firm yet,but we are
fishing for that," Taylor says.Taylor believes that Berrymans can ride out changes in
the insurancemarket. "The situation for firms is getting tighter and tighter. We
arewatching for the next development in the market."Under Taylor's leadership, Berrymans
has a clear vision of its future.Rivals and analysts of the insurance market may express
doubts about itsexpansionist plans and the wisdom of its merger mania, but Taylor
remainsbullish."Insurance companies are looking for real relationships with
theirlawyers," he says. "Not all firms can provide that... We can."The question, of
course, is whether that relationship will suffer asBerrymans continues to
expand.Berrymans: the story so farfrom The Lawyer archive www.the-lawyer.co.uk28 January
1997Insurance firms active as merger approachesSpecialist insurance firms Berrymans and
Lace Mawer have made strategicannouncements in the run-up to their widely anticipated
merger. London firmBerrymans has just made nine of its solicitors partners, while
theManchester firm with which it is in merger talks has revealed that it isplanning to
open up an office in Leeds this year...18 February 1997Berrymans and Lace Mawer
mergeBerrymans and Lace Mawer have merged to create a national defenceinsurance law
firm, called Berrymans Lace Mawer. With 250 fee earners, 80of them partners, it is the
largest insurance law firm in the country, andone of the 30 largest law firms
overall...6 October 1998Tulkinghorn: Everlasting honeymoonWho said mergers need bedding
down time? A recent missive from BerrymansLace Mawer on life together post-merger,
revealed that this need not be.The statement, "Married bliss for legal newly-weds"
proclaimed that just 18months after its merger, caseload is up 25 per cent - and
"married life isclearly suiting the firm"...1 February 1999Berrymans leaves Hall Clark
in tattersCity firm Berrymans Lace Mawer has taken on the senior partner and threeothers
from London-based Hall Clark, leaving the smaller firm facingclosure and 11 lawyers out
of work. Beryl Whight joins Berrymans as aconsultant. She is accompanied by partner
Andrew Pieri and two assistants...8 March 1999Berrymans' Taylor takes new roleBerrymans
Lace Mawer has changed its partnership constitution to formalisePaul Taylor's position
as national senior partner. A new post has beencreated for Taylor, so he can help
consolidate the firm's recently mergednorthern and southern offices. Taylor has resigned
from the managementboard to take up the post. He denies accusations that he has
beensidelined: "I chose to resign from the management team, where I was handson - and
I remain hands on"...26 April 1999Iron Trades reveals mystery panel advisersBerrymans
Lace Mawer and Jacksons are the two firms appointed by IronTrades to help trim its
insurance panel. Last week The Lawyer revealed thatthe...insurance giant had already cut
its 40-strong panel by half and wastaking advice from two 'mystery' firms. David Evans,
senior partner atBerrymans' Liverpool office, has confirmed that both firms have
beenappointed to the panel. "We are obviously pleased. Iron Trades is anexceptionally
important client for us," he says...21 June 1999Berrymans moves into North EastBerrymans
Lace Mawer is securing a foothold in the North East in anattempt to put a stranglehold
on insurance specialists in the region. Thefirm is proposing to take over niche firm
Linsley & Mortimer, whichprovides specialist insurance advice...12 July 1999DAC and
Berrymans enter merger talksDavies Arnold Cooper (DAC) and Berrymans Lace Mawer have
been engaging insecret merger talks. Nick Sinfield, managing director of troubled firm
DAC,met Berrymans Lace Mawer senior partner Paul Taylor last month to discuss apossible
merger. A source close to Berrymans says: "He [Taylor] was seeingif there was anything
on the table for discussion"...19 July 1999Berrymans upbeat after Dubai office loses
head Berrymans Lace Mawer islosing the head of its Dubai office to Denton Hall sparking
a majorreorganisation of its Middle Eastern practice. Nigel Truscott, partner
inconstruction at Berrymans, is leaving the Dubai office this month and willbe followed
by his colleague, commercial solicitor Rita Semaani...
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