PI insurance costs worst dilemma for Irish solicitors

Professional indemnity insurance costs are the worst dilemma for solicitors in Ireland, according to new data released by the Dublin Solicitors’ Bar Association.

The survey found that, besides the professional liability insurance issue, other problems facing the Irish solicitor community are lower profits, a dwindling number of new files, reduced turnover, and increase in clients’ expectations of reduced fees.  The survey, which included more than 175 solicitor firms, featured most respondents comprised of firms with less than 10 solicitors.

Nearly two out of every three solicitor firms surveyed said that their salaries had been reduced due to the economic downturn.  Bonuses for solicitor firms consisting of three to 10 partners were either reduced significantly or eliminated outright, the survey said.

In addition to having difficulties in securing business liability insurance, nearly 50 per cent of firms reported seeking to extend their specialities, writing off bad debts, and changing utility providers.  They also had to improvise their risk and practice management efforts, solicitor firms reported, with a significant percentage reporting that, despite the collapse of the property market, their main expertise was residential property conveyancing.

55 per cent of the smallest firms reported being pessimistic about their circumstances, though firms with four or more solicitors were only 28 per cent pessimistic.  However, just 13.5 per cent of firms had decided to merge with or take over another firm, while 8.6 per cent of respondents indicated that they were considering sharing overheads.

According to Stuart Gilhooly, the president of the Dublin association, this can be attributed to difficulties related to needing to secure professional indemnity insurance, as premium increases related to the files taken on in a takeover could prove to be crippling.

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