The number of sole practitioners and traditional partnerships has fallen dramatically over the past three years, according to new figures from the Solicitors Regulation Authority.
Providing an insight into a profession in the midst of unprecedented change, the figures show that since October 2009, the number of sole practitioner firms in England and Wales has dropped 18% from 4,095 to 3,377. The decline of partnerships has been even greater, with the number down 26% to 2,896.
But the reductions do not reflect a fall in the overall number of firms, which stands at 10,976, fractionally more than three years ago.
The biggest increase is in the number of incorporated companies, which has almost doubled to 2,980. The number of LLPs has also expanded, from 1,101 in October 2009 to 1,541.
Viv Williams, chief executive of the 360 Legal Group business consultancy, said there is a clear trend towards non-lawyer firm managers in corporately structured practices, leaving the traditional partnership facing an uncertain future.
He said: ‘The traditional partnership in many cases is unsustainable, with male-dominated equity partners averaging 60 years old. There is little or no succession planning and a committee-led structure which avoids the fundamental issues facing these practices.
‘Many of them would have gone out of business had the banks been more aggressive in managing their debts, and had interest rates been higher and more volatile.’
Tony Williams of Jomati Consultants said the net figures mask developing trends. Sole practitioners starting a business would probably want to use an LLP or limited company to protect their assets, he said.