Marsh and Legal Business have conducted research in January 2009 into the risks of the largest law firms in England and Wales.

The survey results revealed that the economic downturn has produced new risks for Britain’s leading law firms. Four-fifths of respondents believe that recession had increased the risks facing their firm in the past 12 months. Top risks identified by firms in order of severity are; bankruptcy or acquisition of significant clients; IT security; pressure on fees and the need for ‘instant’ advice leading to claims; conflicts of interest; and errors made by staff/lawyers on complex, high-value transactions.

The survey identified four new risks to the UK legal sector created by the current economic climate, in order of severity; client liquidity or risk of bad debt; credit or other financial problems; increased regulatory burden; and clients looking to apportion ‘blame’.

The survey also found that claims for negligence against property lawyers were increasing dramatically.