The traditional partnership model of legal practice has declined dramatically with almost half of all firms now incorporated companies, according to a long-running survey of the sector published today. The ninth annual UK Legal Services Market Report by IRN Research also notes that 1,300 of England and Wales 10,000 law firms are now operating as alternative business structures.
Despite the impact of government reforms to the personal injury sector and concerns about the impact of Brexit, the survey finds the sector in robust health, generating £35.1bn across the UK in 2018. That was 6.3% up on the previous year, or 3.7% taking inflation into account. In 2019 it is forecast to grow by 5.4% at current prices.
Much of the growth, however, comes from the top 100 firms which continue to outperform the overall market. The is is partly due to acquisitions boosting overall revenue and partly due to the fact that most of their work is in the corporate sector which is performing better than most consumer law sectors.
The picture is less bright in the personal injury/accident/medical negligence sector, which accounts for 11% of the UK market. According to the research fewer than half of practitioners expect revenue to grow in the next 12 months. The increase in the small claims limit, in April 2020, will hit the market by pushing more consumers towards 'DIY law'.
Elsewhere, the research predicts downward pressures on fees due to more solicitors working freelance or in unregulated practices. It notes 'concerns that less regulation of these new suppliers could lower standards'.