<PAGE>
 
                                  EXHIBIT 11
                           LAW COMPANIES GROUP, INC.
                       COMPUTATION OF EARNINGS PER SHARE
                     (in thousands, except per share data)
<TABLE> 
<CAPTION> 
                                                     For the Quarters                For the Nine Month Periods
                                                    Ended September 30                   Ended September 30
                                                --------------------------         ------------------------------
                                                   1997            1996               1997                1996
                                                ---------       ----------         ----------          ----------
<S>                                             <C>             <C>                <C>                 <C> 
Net income                                      $     970       $      574         $    2,844          $    1,262

Less:  preferred stock dividend and
    accretion                                        (283)              --               (458)                 --
                                                ---------       ----------         ----------          ----------

Net income available to common
    shareholders                                $     687       $      574         $    2,386          $    1,262
                                                =========       ==========         ==========          ==========

Average number of shares of common stock
    outstanding                                     1,886            1,913              1,892               1,907

Assuming exercise of options based on the
    treasury stock method using average
    market price                                       --               --                 --                  --
                                                ---------       ----------         ----------          ----------

Average number of primary shares of
    common stock outstanding                        1,886            1,913              1,892               1,907
                                                =========       ==========         ==========          ==========


Primary earnings per share                      $     .36       $      .30         $     1.26          $      .66
                                                =========       ==========         ==========          ==========

Average number of shares of common stock
    outstanding                                    1,886             1,913              1,892               1,907

Assuming exercise of options based on the
    treasury stock method using previous
    year end market price                              --               --                 --                  --
                                                ---------       ----------         ----------          ----------

Average number of shares of
     common stock outstanding
     assuming full dilution                         1,886            1,913              1,892               1,907
                                                =========       ==========         ==========          ==========

Fully diluted earnings per share                $     .36       $      .30         $     1.26          $      .66
                                                =========       ==========         ==========          ==========
</TABLE> 

NOTE:  For the quarter ended and the nine month period ended September 30, 1997,
       the effect of the outstanding warrants and options are considered
       anti-dilutive.

                                      15