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While the end of the assigned risks pool may encourage more insurers into the market, professional indemnity insurance for law firms is as competitively priced as ever.

As law firms experience constant pressure to rein in costs, the pricing of professional indemnity insurance (PII) is high on the agenda. As PII is typically law firms’ third-largest expense, after staff and premises, that 76% of respondents said that they found PII generally to be reasonably priced (a marginal increase on 71% last year) is good news for firms generally. But despite widespread reports of an increasingly soft market, the number of respondents saying their insurance is over-inflated has increased from 7% to 17%.

New reporting requirements under the SRA’s outcomes-focused regulations have put additional pressure on risk teams’ resources but finding the right individuals for the new COLP and COFA roles has been the top priority.

Risk teams have been pulled in many directions in the last few years but top of their agenda throughout 2012 was going through the process to appoint the compliance officer for legal practice (COLP) and the compliance officer for finance and administration (COFA). The new roles were introduced as part of the Solicitors Regulation Authority (SRA)’s push into outcomes-focused regulation (OFR) but for some the process has been painful and protracted, while some firms were still waiting for the individuals they nominated for the COLP role to be approved.

Despite renewed focus on outcomes-focused regulation, IT security and conflicts remain the key threats keeping risk teams awake at night.

This section of the report analyses the likely impact of various risk scenarios on law firms and the likelihood of those situations occurring. Typically those situations that potentially have the most serious impact on a firm’s business are the least likely to occur, and vice versa. ‘Legal Risk Profile’ tables show the mean scores for impact and potential as separate indices.

Following successive years of regulatory change, including the introduction of outcomes-focused regulation, COLPs and COFAs, risk teams are now in a phase of assimilating those changes. Legal Business tracks progress so far

After five years of reporting on the torrent of regulatory change that has swept through law firms, this year’s Legal Business/Marsh risk management and professional indemnity survey finds risk managers within law firms looking to assimilate those changes. In our sixth annual report on the market, the buzzword is ‘embedding’ – ensuring the upheaval caused by the introduction of outcomes-focused regulation (OFR) and the new high-profile risk management roles (the compliance officer for legal practice (COLP) and the compliance officer for finance and administration (COFA)) are properly implemented.

In our fifth annual risk management and professional indemnity survey in association with Marsh, the world’s leading insurance broker and risk adviser, we analyse the latest trends in risk management, reveal the results of our far reaching survey and talk to the leading names in risk management at the City’s largest firms.