They now account for only one in five practitioners, compared to one in three a decade ago.
During the same period, the number of partnerships, including limited liability partnerships, has fallen by 1,822, or 39%. Meanwhile, the number of incorporated companies providing legal services has more than doubled, from 2,400 to 5,085.
During the decade, the market consolidated, resulting in a 9% decrease overall in regulated solicitor’s practices.
Looking ahead to the next ten years, this trend is set to ‘significantly accelerate’ as businesses operating a legal consultancy model such as Keystone Law take over high street and mid-market law firms, according to Arden, which analysed Solicitors Regulation Authority data. It predicts a third of UK lawyers could be working in legal consultancy types of business with five years.
John Llewellyn-Lloyd, head of business services at Arden, said: ‘The legal sector has changed significantly over the past decade, but I think that level of change is nothing compared to the disruption and consolidation we could see over the next few years.
‘The corporate model is winning its battle with partnerships as the legal management structure of choice and at the smaller end of the spectrum, the UK legal market is very fragmented indeed and ripe for consolidation.
‘COVID-19 has effected a quantum shift in the rate of consolidation. These practitioners are under significant pressure to invest in IT infrastructure and reduce back-office costs, but they lack the cash to do so. I believe we will see more and more of these sole practitioners and small firms join the legal consultants whose “officeless” model suddenly looks highly appealing to many.’
