No-one is immune at the moment and even the big boys of the legal world are feeling vulnerable as they consider the sums they hold in their client accounts. Meanwhile the tremors have filtered down to the small high street firms who cannot find PI insurance cover or are being charged astronomical sums for the pleasure.

The City firms, which spoke to The Lawyer on condition of anonymity, have indicated that the issue of safeguarding client accounts is actively under discussion. One magic circle partner said: “We expect to see terms of business going out which exclude all liability for a crash of a bank.”

At the other end of the spectrum…

High street firms are being forced to close because they cannot afford to pay vastly increased PI insurance premiums, while hundreds more are destined to end up in the assigned risks pool (ARP). The ARP provides PI insurance for firms unable to find cover with conventional insurers, but charges huge premiums.

At the ARP renewal deadline on Tuesday last week, industry sources said a number of small firms, mainly involved in conveyancing, had chosen to shut down unable to find cover in the conventional PI market and with the cost of ARP wiping out dwindling profits.

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