The number of law firms in England and Wales slipped below 10,000 more than five years ago and continues to decline inexorably. However, the attrition rate is hardly precipitous, SRA data show.
There were 29 fewer firms in September 2026 than 12 months previously, but the total has hovered around the 8,900 mark for a while. Indeed, the number of incorporated companies hit a record high of 5,267 last month, as the number of traditional partnerships and sole practices trends downwards. Perhaps it is time that the Gazette started writing about law ‘companies’ not law firms.
Economic storm clouds are gathering, nevertheless. These will serve as a further spur to consolidation. You might have noticed that in recent weeks the Gazette has reported on a slew of law firm insolvencies, some involving well-known regional names. At least four have come to grief in the last week alone.
A coincidence? Almost certainly not. Various bellwethers have documented a sharp downturn in headline growth following the post-Covid boom. Median profit per equity partner rose just 2% in 2026, down from 23% in 2025, NatWest’s Legal Benchmarking Report found last month. PwC more recently drew attention to a ‘squeezed middle’ as the City behemoths pull away from the rest.
‘The “squeezed middle” is real,’ says Paul Bennett, a partner at Bennett Briegal who advises other law firms. SME firms are facing a perfect storm of challenges, ranging from rising wage, property, compliance and technology costs, to increasingly price-sensitive clients and pressure on fees. ‘More competition from larger firms and alternative providers is key, as they focus on mid-market work using juniors and technology. There is crucially less room for error after recent years of financial pressure,’ Bennett tells me. Very small firms in lucrative niches are less exposed.
All of this sits uneasily with the government’s boosterism. National demand for ‘solicitors and lawyers’ will rise by more than 12% over the next nine years, according to the latest document to emerge under Whitehall’s industrial strategy. The Professional and Business Services Jobs Plan estimates that the number of professional services jobs will rise by 330,000 from the current
5 million by 2035, with solicitors and lawyers accounting for 15,000 of those roles.
Let’s hope so, but the projection seems optimistic.
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