A leading insurance solicitor has urged claimant firms to follow the lead of defendants and change their business model.

Anthony Hughes, chief executive of national firm Horwich Farrelly, told the 2012 Claims Management Conference yesterday that change is inevitable in the personal injury market.

He said defendant firms had already experienced upheaval in the past decade with the number of practices shrinking and fees slashed.

And with pressure from alternative business structures and the effect of government reforms that restrict claims, Hughes said there is bound to be a similar path taken by claimant firms.

‘The claimant industry is far more disparate with hundreds and thousands of small firms doing small amounts of work.

‘We have been forced to commoditise the product we offer. We work on fixed fees and have changed the cost structure. The insurers forced us to make some of these changes, but it has worked.’

Hughes, on the executive committee of the Forum of Insurance Lawyers, said it was unimaginable 10 years ago that major firms in the sector would merge. But with recent links between the likes of BLG and Clyde & Co and DAC and Beachcroft, the market has changed significantly.

Elsewhere at the conference, staged in Manchester by Claims Magazine, the claimant industry was accused of being in ‘denial’ about the future threats to the market.

Jon Busby, business development director for legal software provider Epoq, said: ‘Your client is far more sophisticated and can deal with a lot more than you think they can.

‘New entrants, like a law firm rebranded or a major brand coming in, will educate your market and do all the things you’re doing badly: transparency, fixed fees and accessibility. All the things lawyers don’t seem to do. I see a lot of grandstanding but no words on clients or technology.’

But some lawyers dismissed the idea that personal injury firms were out of touch.

Andrew Twambley, a director of marketing consortium injurylawyers4u, said: ‘I don’t relate to anything I’m hearing. I’m sure there are rubbish firms out there but we need to stop talking about them and concentrate on the future. I don’t accept solicitors can’t run a business.’