Nearly a third (30.89%) of businesses providing legal services have closed within the last five years, an analysis from Witan Solicitors has revealed.
The research, which reviewed data from Companies House, found that 13,301 companies opened in the legal industry between January 2019 and December 2023.
However, during this period, 4,110 of these companies have entered administration, liquidation, or dissolution.
In response to these findings, Qarrar Somji, Director of Witan, said: “It is difficult to successfully establish yourself in the legal industry and it is one of the harder markets to enter. From building up a strong client base and marketing your firm to hiring the right team and getting SRA approval, it can be challenging for legal service providers to establish themselves.
“Providing legal services involves more than simply practising the law and requires strong business acumen.
“Our research provides potential entrepreneurs with a clear idea of how successful their business will likely be. But more than that, it offers a real indication of how challenging it can be to provide certain services.”
On top of this, the study found that firms dealing with justice and judicial activities are the hardest to open, with a business mortality rate of 40.82%.
Similarly, barristers are also less likely to be successful, with 38.9% no longer operating.
Nevertheless, it is worth noting that the odds are slightly better for law firms, with only 1 in 4 solicitors having closed their doors since January 2019.
If you have any questions about our research, please email Lance (lhoneghan@witansolicitors.co.uk).
