The number of practising solicitors in England and Wales has reached another all-time high as the profession continues to defy all predictions of a potential shakeout.
In August, the Solicitors Regulation Authority reports, the number of PC-holders in England and Wales passed 140,000 for the first time.
There was a further intake of more than 2,000 in September. Regulatory data shows there are now 15,000 more solicitors than five years ago.
This success story for the profession has however attracted warnings from sector consultants that expansion cannot continue indefinitely. Growth in numbers in large firms in particular may be unsustainable in the face of static profits and pressures on fees, they suggest.
Tony Williams, principal of legal consultancy Jomati and former managing partner at magic circle firm Clifford Chance, said: ‘In the last three years, if you look at utilisation rates and hours declining, and revenue per lawyer which seems to have flatlined, margins have been squeezed and yet firms are still recruiting.
‘The fact that the profession is still adding bodies when there is spare capacity is odd, and you would expect if anything for it to be going the other way.’
Williams said the trend in larger firms has been to outsource back-office functions and reduce as far as possible numbers of non fee-earners. But the time may be approaching when firms look at partners and senior associates.
‘There is great reluctance among firms and it seems to be too difficult,’ added Williams. ‘They may be meeting the limits of what can be cut. At some stage there will be a block on recruitment or we move people between departments.’
Big Four accountancy firm PwC last week reported that staff cost as a percentage of fee income grew from 36.7% to 38.5% in top UK firms last year.