Law firms feel the squeeze
18 Apr, 2013
Pressures on practising solicitors in England and Wales are beginning to show in the latest Law Society’s Annual Statistical Report.
Both the number of firms and private practitioners have decreased for the first time ever, while the number of admissions and training contracts are down to the lowest levels since 1999.
According to the report for 2012, published today, the number of practising certificate (PC) holders linked to a named organisation on 31st July 2012 increased by just 0.25% relative to July 2011 – the smallest increase since 1996 and well below the average annual growth rate of ‘attached’ PC holders 3.6%.
The number of PC holders working in private practice in firms registered in England and Wales stands at 87,768 in 2012 compared to 87,973 in 2011. The figures contrast sharply with previous trends which show that, since 1982, the total number of practising certificate holders increased by 208.5% at an average annual rate of 3.8%.
The 2012 report, which has been written up in an updated format which focuses on longer term trends, shows that the number of private practice firms fell from 10,202 in 2011 to 10,102 in 2012, bucking the trend of previous years.
The results show that the growth areas within the legal sector are commerce and industry and employment in foreign law practices. However private firms in England and Wales remain the dominant providers of training.
Commenting on the findings, Desmond Hudson (pictured), Law Society Chief Executive, said: “There is fiercer competition in the legal market than ever before and many of the assumptions that have underpinned the nature and status of practising as a lawyer are being challenged in this difficult environment.
“Tough economic conditions combined with legal services liberalisation, changes to legal aid funding and the civil costs regime are having a major impact on the business models of many firms.
“Law has become a highly competitive and fast-moving business environment. Despite this confluence of challenging trends, there are opportunities for dynamic, innovative and well-managed firms to thrive. It is the function of the Law Society to help solicitors and their practices rise to the challenges, so that businesses and consumers in every corner of England and Wales can continue to obtain high quality legal advice and support from a solicitor.”