The squeeze on the legal profession is in evidence in the latest annual statistics report from the Law Society, which reveals the first decline for over 20 years in both the number of practising and non-practising solicitors across England and Wales; a decline in all but the largest private practice firms; and a further drop in the number of lawyers making partner.
The representative body’s Annual Statistics Report revealed that as of 31 July 2013, there were 158,644 solicitors on the Roll, of which 127,676 solicitors held practising certificates (PCs). Both figures were down on 2012 – by 4.4% and 0.85% respectively – for the first time in over twenty years.
Equally notable was the third consecutive annual decline in the number of private practice firms, with only larger firms with partnerships of 81-plus expanding – up by 4.6% to 23,066. A total of 9,807 private practices were registered in July 2013, the lowest level recorded since a change was made to the way in which firms are counted in 2007.
As at 31 July 2013, 176 alternative business structures had been registered, most of which were incorporated companies limited by shares.
Of more surprise given the recent sustained increase in the in-house sector, the numbers of organisations employing PC holders fell in 2013 from 4,087 to 4,027 in commerce and industry (C&I), and from 661 to 623 in government. This is in sharp contrast with the previous year when C&I lawyers were up by around 5%.
However, the Law Society’s latest report acknowledges that the long term outlook is one of growth for the in-house sector, with the average annual growth in PC holders standing at 5.2% over the past 15 years, while in private practice that figure is 2.4%.
C&I now accounts for 11.6% of all PC holders.
The report further finds: ‘While employment of PC holders in private practice was around 40% higher than fifteen years earlier (despite annual falls in 2012 and 2013), numbers of PC holders working in-house have more than doubled over the same fifteen year period (albeit from a lower base).
‘Over one-fifth of all PC holders in employment in 2013 worked in the in-house sector, up from 14.3% in 2003.’
This year there was marginal improvement when it comes to diversity, with the report showing that women made up 47.7% of all those with PCs in 2013, up a fraction from 47.4% of PC holders in 2012 and amounting to a total of 60,871 lawyers. The main growth in PC holders over the past 30 years is accounted for by women entering the profession. Further, black, Asian and minority ethnic groups continue to represent a growing proportion of PC holders, now equalling 13.1% of PC holders.
Meanwhile the increasing difficulty in becoming a partner is more in evidence than ever in the statistics, which show that the proportion that are made partners has fallen from 51% in 1993 to 40% in 2003 and 34% in 2013.
The declining figures echo the tone of last year’s results, in which Law Society data showed the number of training contracts offered by law firms in England & Wales was at its lowest level since 1999. That report also revealed that new solicitor admissions had seen nearly a 25% drop from 8,402 in 2011 to 6,330 in 2012.
On the latest statistics, outgoing Law Society chief executive Desmond Hudson said: ‘Change and competition within the legal sector is intensifying and this is having a major impact on many businesses.
‘An improvement in the economy has not yet fed through to all solicitors, and many smaller firms are struggling in the wake of fundamental changes in areas of work such as legal aid, civil justice and family law.
‘The Law Society is helping solicitors and their practices adapt to the regulatory and management challenges, so that they can continue to provide high quality legal advice that makes a positive contribution to businesses, the public and the rule of law in England and Wales.’
Sarah.downey@legalease.co.uk