Regulator data indicates legal services sector has remained 'stable' during pandemic

Data compiled by the Legal Services Board (LSB) from legal services regulators has shown that the sector has remained “stable” during the pandemic. The data suggests that while parts of the profession have faced challenges, overall numbers of regulated lawyers remained in line with pre-pandemic norms. 

The LSB asked various regulators, including the Solicitors Regulation Authority (SRA), to provide information on practising certificates renewals and numbers of law firms, to assess the number of lawyers and firms currently regulated.

The LSB compared the number of solicitors registered to practise prior to the pandemic, against the number registered since the start of the pandemic. The number of regulated practising solicitors in England and Wales increased by 4.7 per cent in the 12 months from December 2019. In the same period, the number of firms regulated in England and Wales fell from 10,278 to 10,080, a decrease of 1.9 per cent. 426 firms opened, while 539 closed. 319 firms ceased to practise, 127 merged, 62 changed status and 31 did not share a reason for closure. Numbers of law firms peaked at 11,304 in June 2012 and this recent decline is in line with a steady fall in numbers since then.  

Dr Helen Philips, LSB chair, said: "For the first time, we can see the emerging data on the impact on the profession in terms of turnover and numbers of regulated firms and lawyers. Turnover in the legal services sector remained flat in 2020, while turnover across all UK services fell. Overall numbers of regulated law firms and legal professionals in England and Wales remained stable.”

The latest ONS Monthly Business Survey data shows that in 2020, the annual turnover of legal services in the UK remained flat at £36.8 billion, the same as the 2019 figure. Turnover of all UK services in 2019 was £2,274.8 billion and £1,957.3 billion in 2020, representing a 14 per cent drop.

There has been widely reported concern that the pandemic has had a disproportionate impact on certain societal groups, such as individuals from BAME backgrounds, women and younger people.  

Philips echoed this concern, commenting: "We are very concerned about the impact of covid-19 on the diversity of the profession. As the sector recovers, we must continue creating and supporting a sector that looks like the society it serves.

"Everyone who needs legal advice must be able to access it, and we are committed to working with everyone inside and outside the profession to reshape legal services to better meet the needs of society."

Philips acknowledged that, “The overall figures mask that the crisis has affected parts of the profession differently… there have been substantial changes in consumer demand across different parts of the sector, with some areas dropping off significantly and others booming. The LSB's focus continues to be on supporting recovery, growth and competition that supports the public interest.”

The LSB reported that legal aid firms had “struggled” in particular during the pandemic, with more than 70 offices closing since April 2020. Figures are not yet available regarding the number of solicitors furloughed. It is possible that the closure of the scheme may have an impact of the number of solicitors who continue to practise. 

Information from the Bar Standards Board regarding barristers will be available later this year. It has been widely reported that self-employed individuals have faced financial challenges during the pandemic, often blamed on a lack of support from the government, and it will be interesting to see if this has been the case for self-employed members of the legal profession.