More than 500 applications to start new law firms
By Andrew Merrell | 13th April 2018
If one sector is buzzing with entrepreneurial spirit it appears to be the legal profession.
There were 514 applications to the SRA to start new law firms last year according to research by chartered accountants Hazlewoods.
The Gloucestershire-headquartered business advisers, which specialises among other things in the legal profession, said the figures "underlined the health of the legal profession despite Brexit".
It may surprise to learn that the figure actually represents a fall on the previous year where the Solicitors Regulation Authority dealt with more than 660 applications.
Nevertheless, with 10,400 solicitor firms in the UK at the end of 2017, the number of applications for new firms in the last year represents five per cent of the current market.
Jon Cartwright, partner at Hazlewoods, said: "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."
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.
The boutique firms then market themselves on the added expertise this focus allows them and allows them the option of targeting exclusively high margin areas of work.
According to Hazlewoods, which has its headquarters in Staverton, there are now over 800 lawyers working for the new breed of 'platform' firms.
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).
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