The banking sector needs to be doing more to support solicitors during the recession, the Law Society has said.
The society is starting a series of meetings with all the major retail banks to explore how banks can help support solicitors through the recession.
President Paul Marsh approached the banks and the British Bankers’ Association looking to talk about the issues facing legal businesses, many of which have been hit by the credit crunch.
In Birmingham, many firms have been hit by the downturn in the property market, with a host of big corporate names being forces to cut jobs.
Des Hudson, chief executive of the Law Society, said: “We hope to develop a common understanding of our members’ various business models and the factors affecting judgement of risk of lending so that we can encourage the banks to take a supportive approach to solicitors to help them through the downturn.
“In these meetings we will discuss the extent of the current problem, the prognosis for the future and steps banks can take to minimise the impact on the profession. We would also like to agree to regular meetings to keep the situation under review.
“This is one of a series of proactive steps the society is taking very urgently to support solicitors in these challenging times. We are also reviewing the process and market for professional indemnity insurance with a view to avoiding in future the difficulties that many solicitors faced this year.”
This move follows the announcement of a first phase of a Law Society action plan which aims to assist solicitors with their professional indemnity insurance (PII) renewals. A Law Society sub-group will be seeking expert advice on the insurance market to establish whether there are ways in which some of the difficulties that have been experienced this year can be alleviated for the future.
The society is currently receiving feedback from solicitors on their PII renewal experiences and intends to start discussions with insurers and brokers in order to assist the Solicitors Regulation Authority in reaching an agreement on what service standards can be expected in the renewal process.
A practice note providing advice on how to best source PII will be compiled in the light of this advice and will be released to the profession next year in good time for the renewals season. The society is also looking at the pros and cons of a single renewal date versus staggered renewal dates.
More than 1,200 jobs are thought to have been either lost already or be on the line in the UK’s top 200 law firms, with those responsible for making the cuts keen to argue downsizing is an inevitable response to the crunch. Most recently, national firm DLA Piper said jobs in its Victoria Square Birmingham office could be at risk after it launched a redundancy consultation that could see up to 20 fee earners and 20 support staff cut. Cuts would come from its Birmingham, Leeds, Liverpool, London, Glasgow and Manchester offices.
DLA chief executive Nigel Knowles said: “Along with every other law firm and professional services provider we are affected by the current economic conditions. There has been a reduction in the demand for services in the UK real estate and finance-related groups, and as a result we are in consultation with some of our people within those teams about possible redundancies in six of our locations.”