Why do people choose law as a profession? Why, more particularly, do they plump for insurance law? Of all the practice areas batting their eyelashes at gauche young lawyers, how does insurance seduce prospective specialists?
The heady thrill of litigation is often one explanation. Insurance litigation necessitates a knowledge not just of the law, but of whichever specific area the claim has arisen from. Do budding litigators emerge from law school with a subsidiary diploma in asbestos or hurricanes?
Contentious insurance work, particularly at its highest level – complex medical cases and major disasters, for example – therefore poses an intellectual challenge, relished by practitioners. The same can hardly be said of Mrs Jones’s whiplash. Low-value, high-volume bulk work is arguably located in the GM Vauxhall Conference league of the insurance sector.
Unglamorous, repetitive and law rates – bulk claims work seems more trouble than it is worth. But not so for Beachcroft Wansbroughs. The national firm has just unveiled its fast-track claims litigation service, entitled ‘Mutual Law’.
This brainchild of finance director Chris Charles and partner Nathan Butcher will operate along similar lines to a scheme by national counterparts Shoosmiths, where personal injury (PI) partner John Spencer heads a dedicated PI division. Bulk insurance work is not an unusual component of many law firms. Berrymans Lace Mawer, Davies Lavery, Davies Arnold Cooper et al all deal with high-volume claims from regional offices.
What makes Mutual Law different is the razzamataz with which it has been launched. The firm is promoting work that other firms seem almost embarrassed to deal with. Fast-track work is more necessary than necessary evil for Beachcrofts.
Mutual Law will be run from three offices under the command of Sally Yuill in Bristol, Peter Lindsay in Manchester and Butcher in Birmingham. As cost saving is inevitably a priority, these regional bases offer lower, more competitive overheads. The three Beachcrofts partners will have no fee-earning responsibility, their role being one of pure management.
It is a brave step. While other firms depart from the high-volume arena citing poor returns, Beachcrofts has not only welcomed low-value claims work, it has made a feature of it.
Being held to ransom by clients is not a situation firms should seek to encourage. Two years ago, Hammonds Suddards Edge divested itself of its interest in Devonshire Claims Service, a professional indemnity claims-handling company. Hammonds Direct, the bulk division it has retained, is for conveyancing work, where money can be made.
Beachcrofts’ optimistic logic runs thus: 80 per cent of all litigated cases in this country are fast-track claims. Insurance companies are therefore saddled with hefty legal bills for these often straightforward claims, which do not require legal erudition, but bums on seats. For insurers, motivated primarily by the bottom line, it is up to law firms to show how rates can be reduced. Mutual Law is Beachcrofts’ response, and would seem to be everything its insurance clients are asking for.
You can argue that the policy of taking the rough with the smooth, in the hope that handling fast-track claims will lead to instructions on more inspiring cases, is failing to reap rewards. Perhaps, then, Beachcrofts has made a sensible decision. By embracing low-value, high-volume work, the firm has adapted to its market. But what message does it send to rivals and clients?
The firm will have to make sure its reputation for more complex claims is not dented by its new image as fast-track enthusiast. Separate, recognisably different branding should help. Mutual Law has solved the problem of disgruntled lawyers, unsatisfied by unchallenging caseloads. Claims will be handled by teams, each of which includes a lawyer, a paralegal and an administrator. The lawyer in the team will focus on strategy.
Insurance clients are notoriously fickle fellows; just look at how often they review their panels. Mutual Law matches what these clients demand. Let’s hope the loyalty is reciprocated.