A City investor in the legal profession has urged firms to diversify if they want to survive.

Rob Terry, founder and chief executive of the Quindell Group, which moved to acquire Liverpool personal injury firm Silverbeck Rymer in January, said multi-disciplinary practices are the best way to protect profits.

Terry told a claims management conference in Manchester last week that lawyers’ fees were an ‘easy target’ for a government trying to reduce legal costs.

‘You need to launch ­multiple brands and to make sure you have re-skilled your business to be able to operate these brands,’ he said.

‘However much a law firm cuts costs and increases efficiencies, if they are not controlling rehabilitation or medical reporting processes the costs will not lower.’

Terry said that investments in technology and offshore processing were also essential.

His own company, which trades on the Alternative Investment Market, has investments in medical evidence provider Mobile Doctors and the car insurer Ai Claims Solutions.

Terry said Quindell hopes to confirm its status as an alternative business structure soon and would be interested in speaking with other firms and claims management companies about further investment.

He told the conference there could ‘easily’ be 30% fewer law firms in 10 years’ time, a figure echoed by a number of other speakers.

Anthony Hughes, chief executive of national insurance firm Horwich Farrelly, said claimant firms face similar upheaval and consolidation to that experienced by defendant firms in recent years.

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

‘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.’

Donns LLP

Manchester-based personal injury firm Donns LLP was placed in administration last week after running into financial difficulties. Forty-two staff were made redundant as a result.

Administrator PwC immediately sold the firm’s 2,500 cases to minimise disruption to clients. Irwin Mitchell has picked up personal injury cases and C Turner Solicitors is handling Donns’ financial mis-selling and payment protection claims.