Aon borrows 30 lawyers to slash in-house costs

Insurance giant Aon is setting up a 30-strong in-house legal department to be staffed entirely by lawyers on secondment from panel firms.

The team, which is understood to be the first of its kind, will handle solicitors’ professional indemnity claims for Aon claims Solutions (ACS)- which Aon is launching in place of the near-defunct Solicitor’s Indemnity Fund.

The former managing partner of Rowe & Maw, Andrew Carruthers will be head of litigation at ACS and will build up and run the legal team.

Those seconded will range from assistant to partner level, and will spend an average of one year with the insurer.

Carruthers himself is on a three-year contract. He will work there three days a week, and remain a partner at Rowe & Maw part-time. He stood down as managing parnter a year ago after reorganising the management structure during his 18-month term and doing away with his own role.

Aon has set up a panel of seven law firms to handle professional indemnity work for ACS. They are Barlow Lyde & Gilbert, Beachcroft Wansbroughs, CMS Cameron McKenna , Davies Arnold Cooper, Eversheds, Reynolds Porter Chamberlain and Rowe & Maw.

The Solicitor’s Indemnity Fund ceases to exist on 1 September; and from then on firms will be able to buy professional indemnity cover fron approved insurers.

Carruthers says: “The background to it is a desire to create a multidisciplinary team of lawyers and insurance practitioners. It is meant to be a new way of helping the profession in this new climate.

“We want people for quite a long time, a year on average, but I think a little bit of rotation is a good idea. The people concerned will take the experience of being involved in claims handling back to their firms with them.”

The move is a way of reducing costs for the insurer; as Aon will not be paying normal hourly rates but will pay just above basic salaries.

ACS managing director Martin Thomas says:” We get a quality that those seven firms clearly can bring that sometimes you can’t bring in yourself. This gives us much more flexibility in terms of the resources that we have got within Aon.

“It gives us a pool of seven good-quality firms with experienced individuals who can come in and be very creative.”