Number of law firms declines to 2007 level

The number of law firms registered in England and Wales has declined by one per cent to 10,102, according to the Law Society's annual statistical report.

This brings the number of private practice firms on 31 July 2012 to just below the figure for 2007, after reaching a peak of over 10,400 in 2010.

The number of sole practices fell by 2.5 per cent last year and those with two to four partners by 1.1 per cent.

This was offset by a 5.3 per cent increase in firms with five to ten partners, further increases in those with 11 to 80 partners and a 16 per cent increase in firms with 81 or more partners.

"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," Desmond Hudson, Law Society chief executive, said.

"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."

Although the number of PC holders in private practice fell by 0.23 per cent, the number of in-house solicitors grew by 1.56 per cent. The total number of solicitors on the roll is now 165,971, up from 159,524 the previous year.

Solicitors from black and minority ethnic (BAME) groups made up 13 per cent of all PC holders, twice the proportion in 2002.

Although this is lower than the BAME representation in the general population, at 14.6 per cent, minority solicitors now make up more than a quarter of admissions, an increase on the figure of 20 per cent in 2007 and 16 per cent in 2002.

The total number of admissions, however, fell by the biggest amount since records began to 6,350.

There was a 62 per cent drop in overseas lawyer transfers and a decrease in transfers from all other groups apart from barristers, which went up by 5 per cent. The number of training contracts fell to 4,869, the lowest level since 1999.