Specialist re/insurance broker Miller has identified key business and regulatory risks shaping the legal sector in 2025, highlighting economic uncertainty, supply chain resilience, cyber security challenges, and evolving regulatory frameworks.
The analysis comes amid a changing global landscape marked by political and economic shifts, ongoing geopolitical tensions, and technological advancements.
Despite concerns over the UK’s economic outlook, a recent SME survey by Iwoca found that 71% of businesses remain optimistic about their trajectory, with more than half planning to expand their workforce.
Miller noted that while short-term stability remains a priority, firms are also focusing on long-term strategic growth. Economic factors such as taxation, inflation, and potential tariff changes remain critical considerations.
Additionally, climate-related risks, including extreme weather events, continue to impact businesses through direct physical damage and indirect disruptions to supply chains and insurance costs.
Miller highlighted that modern supply chains are increasingly global and complex, even in professional service sectors such as legal, accounting, and conveyancing. As firms transition to cloud-based platforms for document management, accounting, and case management, cyber security risks become a significant concern.
The rise in cyberattacks, driven in part by geopolitical conflicts, has already impacted businesses, with incidents such as the CTS cyber-attack, and Capita data breach serving as recent examples.
Risk Evolves managing director Helen Barge identified the role of managed service providers (MSPs) in business resilience. The firm has observed inconsistencies in service standards among IT providers, with cases of providers failing to implement basic security measures such as multi-factor authentication.
The Information Commissioner’s Office (ICO) fined Advanced Computer Software Group £6 million for failing to implement such security controls, leading to the compromise of over 80,000 NHS records. Miller noted that insurers are increasingly focused on these risks, as cyber security failures can directly impact claims and coverage considerations.
New technological advancements, including artificial intelligence and quantum computing, present both opportunities and challenges for the legal sector. Miller said that regulatory frameworks are evolving to keep pace with the risks associated with deepfake technology and sophisticated cyber-attacks.
The ICO is set to undergo structural changes under the Data (Use and Access) Bill, which will introduce expanded investigatory powers and increased penalties for data security breaches.
Regulators are also taking a more proactive stance on workplace culture and governance. Miller said that ESG considerations remain a focus, particularly in relation to workplace standards, inclusivity, and employee retention.
The UK government’s proposed Employment Rights Bill could prohibit the use of non-disclosure agreements to prevent victims of sexual misconduct and harassment from speaking out. Regulators are placing increased emphasis on workplace culture, with insurers also monitoring these trends, as poor governance and workplace misconduct have a direct correlation with claims exposure.
Miller’s analysis underscores the need for firms to navigate a complex regulatory and economic landscape in 2025. As risks evolve, businesses in the legal sector will need to adapt to new compliance requirements, cyber security threats, and ESG expectations, all of which have direct implications for insurance coverage and risk management strategies.
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