Speculation is mounting that Norwich Union (NU) is gearing up to buy claimant law firm Irwin Mitchell.

NU denied any interest in buying the firm, but one senior source said: “NU definitely wants its own law firm, and the most logical move would be to buy Irwin Mitchell.”

Rumours circulated as the government took a further step to
opening the gateway for insurers to buy law firms.

The draft Legal Services Bill, published this week, is described colloquially as Tesco law', because in effect it will allow insurers, loss adjusters and brokers to buy law firms.

Another source speculated that Irwin Mitchell could be split up with NU opting to buy its claims handling division.

Jonathan Gulliford, operations director of Co-operative Group and formerly head of RAC's legal services division, said any moves to buy a law firm would be fraught with problems.

He said: “Buying existing law firms would be fraught with extra difficulties because it makes it even harder to integrate when merging. The risk with buying a law firm is securing the rainmakers, and guaranteeing that they continue to bring the work in.”

Co-operative Group is in the throes of establishing its own legal services division to be ready to launch after the Bill has been passed.

“The intention is to get the Bill through in the next parliamentary session, then the legal services board has
to be set up,” said Gulliford. “It will be mid-2008 to early 2009 before the framework will be provided.”

➔ The RAC is set to outsource its uninsured loss recovery team, putting 90 jobs at risk at its Bristol base. RAC
said a review ended in a decision to outsource the solicitors practice.