Employment in London’s legal services continued a two-year decline with another drop in the first half of 2013.

The number of people working in the legal sector in the capital fell to 101,900 by the end of June, according to new figures from lobbying group TheCityUK.

That represents a 1.1% fall from the end of 2012 and a 11% drop since 2011, when employment figures reached a post-crash high of 114,900. As with most other sectors, legal services reached its peak in 2007, with 118,800 people working in London.

The rate of decline, however, was not as great as in insurance and accounting, where staff numbers in those sectors fell in 2013 by 2% and 1.7% respectively from December 2012.

Across all financial and professional services in London, employment dropped by 0.9% from 675,600 to 669,600, in the first half of calendar 2013.

Legal services remains the third biggest employer in the City, although the sector employs less than half the number employed in the insurance sector.

The CityUK said surveys showed London-based firms remained optimistic about employment prospects. It also pointed to research by recruitment consultancy Morgan McKinley that suggested professional services employment may bounce back in the third quarter of 2013.

The CityUK report adds: ‘Despite a slowdown of the UK economy in recent years and a challenging trading environment for financial services, the London head-count has increased by 33,700 from the low seen in 2010.'

As evidence of recovery it cites figures showing a steady increase in tube and bus journeys in the capital, and a decline in City office vacancy rates from around 10% in 2010 to around 7% today.