Hammond Suddards is making its liability insurance department a separate business because it is not successful enough.
Exactly how this will be achieved was discussed at a partnership meeting on Saturday (12 February), but a rigid policy has yet to be devised.
Chris Jones, Hammonds' managing partner, says: “We will be looking at all the possible options. It may be that the partners will want to run it on its own.”
The department is currently part of the main structure of Hammonds and it shares the management and support services of the rest of the firm.
But Jones says: “We are building it into a stand-alone business.
“We are giving it its own management structure.
“All the other departments share the mainstream business management structure and experts, such as finance directors and IT people and the like.
“But liability insurance will become separate. It will not be dependent on the mainstream business – billings will be made direct to the unit.
“Margins have been squeezed and panels have come in. It is not an easy task to bring in the margins on this. Looking ahead, that is not a part of Hammonds' future.”
Partners met on Saturday to discuss the objectives of the firm and how to turn it into a top 10 corporate legal practice.
None of the liability insurance department's four partners – Andrew McDougall, Paul Large, Jane Dixon and Peter Metcalfe – was available for comment.
But Jones says: “Their incomes will be maintained as if they had stayed on in the normal way.”
One of the measures discussed at Saturday's meeting was how to make the firm's management structure take on a more corporate character.
Partners have decided that a partnership board – consisting of the senior and managing partners – will be created to oversee the implementation of strategic changes.
According to Hammonds, that board will be separate from the executive, which is responsible for managing the firm and consists of the senior partner, managing partner, support directors and office heads.