With an increasing number of solicitors opting for freelance careers, the legal profession in the UK is witnessing a notable shift, but this transition also poses challenges concerning the procurement of professional indemnity insurance (PII).
When it comes to uncovering the rise of freelance solicitors, the hurdles they face in securing PII and the implications for the broader legal landscape cannot go unnoticed. In fact, since 2019, regulatory changes have permitted individual solicitors to practise on a freelance basis without the need for entity authorisation, and this shift alone has led to a significant increase in freelance practitioners.
Industry Research
According to the Solicitors Regulation Authority (SRA), the number of freelance solicitors has more than doubled over the past three years, rising from approximately 300 in 2021 to around 650 by early 2024, and yet despite this growth, freelancers still constitute less than 1% of all practising solicitors in England and Wales.
For experienced solicitors, however, the appeal of freelancing is evident with the average age of a freelance solicitors being approximately 50 years with an average of c.20 years in practice.
What is more, freelancing has also attracted a diverse demographic within the legal profession, as 61% of freelance solicitors are male compared to 48% in the profession overall. Additionally, Black solicitors represent 8% of all freelancers, a significant increase from their 3% representation in the wider profession, and Asian solicitors account for 17% of freelancers, compared to 12% in the broader solicitor community also.
However, the SRA survey also revealed that 79% of freelancers were motivated by the desire for flexibility, whilst 75% sought greater independence in their professional lives, indicating that the decision to go freelance is driven primarily by lifestyle and autonomy rather than financial necessity.
This suggests that for many experienced solicitors, freelancing is a way to regain control over their workload, client relationships and work-life balance rather than a last resort. And yet, despite these benefits, the challenges of securing professional indemnity insurance remain a significant barrier and prevents more solicitors from making the transition.
Securing adequate and appropriate of professional indemnity insurance (PII) is one of the most critical requirement for freelance solicitors, however, this has proven to be a significant obstacle with SRA research indicating that nearly a quarter of freelance solicitors initially struggled to obtain PII coverage, with some unable to secure it at all.
Exploring the report, several factors contributing to this challenge include:
- The perceived risk: whereby insurers may view freelance solicitors as higher risk due to the absence of a firm structure and oversight.
- A lack of historical data: whereby the recent emergence of freelancing in the legal sector means there is limited data to assess risk profiles accurately.
- And compliance concerns: whereby operating independently means freelancers may face scrutiny over their adherence to regulatory compliance and risk management practices.
Together, these concerns can lead to higher premiums, limited policy options or outright refusals of coverage, thereby potentially deterring solicitors from pursuing a freelance career.
In order to help mitigate these insurance challenges, freelance solicitors might consider the following strategies:
- Adapting operating models: where aligning services with insurer requirements, such as specialising in lower-risk legal areas or implementing robust risk management protocols, can enhance insurability.
- Joining professional associations: as membership in professional bodies may provide access to group insurance schemes, offering more favourable terms and coverage options.
- Or consulting specialist brokers: as engaging with brokers who specialise in legal PII can assist freelancers in navigating the insurance landscape and securing appropriate coverage.
The Current Landscape
Overall, the difficulties in obtaining PII could inhibit the growth of the freelance solicitor sector all together, and if insurers remain hesitant to provide coverage, the benefits of freelancing are occasionally overshadowed by the associated risks and costs, discouraging solicitors from this path.
As well as this, a general lack of accessible PII options could limit the diversity and flexibility within the legal profession and therefore affect clients seeking alternative legal service models too.
Because of this, addressing these insurance challenges is absolutely critical to support the evolving landscape of legal services, and the collaboration between regulatory bodies, insurers and professional associations is essential to develop solutions that ensure freelance solicitors can obtain the necessary coverage to practise safely and effectively.
amberis’ Take…
At amberis, we completely understand the complexities of legal insurance and the need for bespoke protection, and as a truly independent, FCA-regulated broker, we work with industry-leading insurers to develop tailored ATE solutions that meet the unique needs of solicitors.
To us, our 20 years+ experience and strong partnerships across the industry allows ut to provide strategic, client-focused support that goes beyond a one-size-fits-all approach, and we believe that in order to offer the very best in expert guidance and insurance solutions that work for you, insurance needs to be done one way and one way only: the right way.
