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First joint research into work of solicitors’ firms published
17 January 2013

The Law Society, the Legal Services Board and the Ministry of Justice have published the results of a research project into the supply of legal services by solicitors’ firms.

The report “A time of change: solicitors’ firms in England and Wales” is the culmination of one of the largest ever surveys into the activities of solicitors’ firms. It is also the first time that these three organisations have partnered together in this fashion for research of this type, scale and scope, with a sample of 2,007 firms. The report reveals how solicitors’ firms of all types are performing, in the context of recession, market changes, regulatory developments and legal aid reforms.

Some of the key findings thrown up by the research suggest that:

firms report their most common problems as compliance with regulations (29 per cent of firms), responding to competition (23 per cent), adapting to changes in legal aid (23 per cent), and in securing finance (21 per cent). Of those reporting problems in securing finance, just over half have experienced problems obtaining bank finance and the remainder with equity funding

  • 42 per cent of firms have reported a decrease in turnover in the past three years, compared to 32 per cent reporting an increase and 27 per cent reporting no change. Smaller and medium-sized firms are significantly more likely to have reported decreases in turnover
  • six per cent of firms are giving consideration to seeking external investment under ABS provisions
  • 64 per cent of firms engaged in media advertising with the most common form of advertising being the internet (54 per cent), followed at a distance by local newspapers and magazines (30 per cent)
  • 31 per cent of firms currently working with legal aid funded cases were considering withdrawing from one or more areas of legal aid in the next three years, particularly those firms working in family law.

The report’s findings also indicate that:

  • residential property (48 per cent of firms) and wills, trusts, probate and estate administration (40 per cent of firms) are the most common areas of work. 27 per cent of firms reported that they conducted at least 90 per cent of their activities in a single category of work
  • new firms, those with a majority of female partners, firms with a majority of BAME partners and those doing 50 per cent or more work in crime or immigration reported lower income per fee earner than other firms ??? 19 per cent of firms in the sample were new within the past three years, 50 per cent of which were single solicitor firms
  • 87 per cent of firms outsourced one or more internal or external activities

Commenting on the research, Des Hudson, the Law Society chief executive said:

‘Solicitor-led firms are the single largest group of suppliers of legal services. Understanding how these firms structure themselves and deliver services is vital to understanding the market as whole.

‘This research provides valuable insight into the challenging issues facing our members and a crucial foundation for monitoring change over time and for assessing the impacts of and response to liberalisation of the legal services market and changes to legal aid funding.’

Chris Kenny, LSB chief executive said:

‘We are really pleased to have been able to partner with the Ministry of Justice and the Law Society to undertake this research. The findings provide knowledge about solicitors firms that didn’t previously exist and helps to fill gaps that had previously been filled by assumption and anecdote.

‘The results of the survey confirms the diversity of firms in terms of their financial performance, the very different things they do for very different consumers, and the fact that many firms mix up different market segments, all of which tests the assumption that all firms face the same challenges. It also shows that a significant proportion of these firms are performing well, despite tough economic conditions.

‘The findings also outline the reality that competition exists in legal services, with some firms doing better than others across all the different market segments ? just like in most other sectors.’

To view a copy of the report, click here.

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