There were 514 applications to the SRA to open new law firms in 2017*, underlining the health of the legal profession despite Brexit related uncertainty says Hazlewoods, Chartered Accountants and Business Advisers who specialise in the legal profession.
With 10,400 solicitor firms in the UK at the end of 2017, the number of applications for new firms represents 5% of the current market.
Hazlewoods says that the number of applications is driven in part by the growing trend for lawyers setting up deliberately niche firms.
These ‘mono-sector’ boutique law firms are established to focus on a single service line of work, such as employment law, or to serve a particular sector. These boutique firms market themselves on the added expertise this focus allows them. It also allows these niche firms the option of targeting exclusively high margin areas of work.
Growing entrepreneurialism in the profession is further evidenced with Hazlewoods research showing there are now over 800 lawyers working for the new breed of ‘platform’ firms. These are decentralised practices where lawyers work remotely and use shared services offered by a central hub.
In November 2017, ‘platform’ firm Keystone became the third UK law firm to float on the London Stock Exchange, raising £15 million and listing on AIM (Alternative Investment Market).
Jon Cartwright, Partner at Hazlewoods, comments: “The legal profession is currently a hotbed of innovation and new business models – leading to a wealth of new start-up firms coming to market.
“Many more partners realise the opportunities now available for them to create their own niche, sector-focused firm in a healthy market environment.”
“Developments in IT over the past decade have made it easier to create a much wider variety of law firm structures, beyond a traditional firm where all solicitors are based in the same building. For example, online portals mean lawyers can now assemble documents and communicate securely with clients even if all of the solicitors working on the case are in separate locations.
“Cheaper technology has lowered the financial cost of entry into the market for many lawyers and start-up firms as more solicitors and partners are now able to work remotely.
“Although the number of applications represents a slight drop from the 667 made in the previous year, it is a good performance for the legal profession amid potential Brexit concerns in the market."
*Applications to the Solicitors Regulation Authority (SRA) for a licence to open a new law firm