Law firms are increasingly under the microscope following the legacy of the corporate scandals such as Enron, according to panel of speakers at the PLUS Conference.

Underwriters and brokers discussed loss trends affecting market changes in lawyers? E&O (errors and omissions) and related lines at the Fairmont Hamilton Princess this week.

?Claim severity is related in part to major corporate scandals over the last five years,? Elizabeth Pitrof, one of the founding partners of Kerns, Pitrof, Frost & Pearlman, LLC, said on Monday.

Ms Pitrof said a survey produced by the American Bar Association last year noted big industry losses have grown larger.

She said the survey revealed that legal malpractice cases of $2 million or more have jumped 50 percent for the period 2000-2003.

?A recent article in the Wall Street Journal reported that Kenneth Lay and Jeffrey Skilling of Enron, as part of their defence, pointed to the lawyers to blame for their advice,? she said.

?Law firms are increasingly designating a partner to serve as general counsel to implement or expand ethics guidelines and provide oversight in identifying potential malpractice claims.?

Ms Pitrof said corporate boards are more open to examining whether the law firm handling its legal work may share blame for corporate problems.

?The size of global business deals exposes law firms to greater risks and potential damages and growth in (the size of) law firms creates the potential to overlook conflicts of interest.?

Nancy Settergren, managing director of Aon, said trends in loss claims have also been affected by the aftermath of the economic bubble in the late 1990s.

?The policy year from 1999-2000 has been a trend of increasing frequency of severity but as in 2004-2005 the severity is nowhere close to D&O (Directors and Officers) side,? Ms Settergren said.

Lorene Phillips, vice president, Allied World Assurance Company, said: ?Client?s perception is that there has been a huge change in the current environment. Perception is reality and that drives the demand for more capacity and, post-Enron, they are concerned.?

Ms Settergren said with more financial failures, the difficulty of meeting market expectations or failed business plans may have pushed people over the edge and they are looking to recover some money.