LFaaS (Law Firm As A Service) V: ABSs – What's New, What's Coming Into View, What's Working & What's Not?

Author:Mr Richard Kemp
Profession:Kemp IT Law
 
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This is an extract from Richard Kemp's presentation at The Alternative Legal Management Summit in September 2016.

Supply-side macro-picture: UK GDP, private practice solicitor numbers and demographics

Measured against UK GDP, the role of private practice solicitors in the economy has increased over the last twenty years: there was one private practice solicitor for each £17.7 million of UK GDP between 2011 and 2015, compared with £19.6 million between 1996 and 2000 (an increase in penetration of 10%).  However, although the private practice sector continues to grow, that growth has slowed in recent years - strikingly, and the first Table and Chart below show, it's taken 8 years to get from 80,000 to 90,000 (12.5% growth), the same time it took previously to get from 60,000 to 80,000 (33.3% growth) :

Complicating the profession's demographics, the entry rate is also down 17% on 2004/05 and the exit rate is set to tick upwards as the boomers who qualified in the '70s and '80s start to retire, and more people leave private practice mid-career for other opportunities.

The rise of in-house solicitors

The number of in-house solicitors has more than trebled since 2000:

2015: 17,393 in-house solicitors 2010: 12,479 2000: 5,189 By way of contrast, equivalent figures for the Bar (independent and employed) show around 25% growth from 2000 (12,920) to 2015 (15,899).

The ratio of in-house to private practice solicitors has become closer and the growth has levelled, having been dramatically in the favour of private practice. There is now 1 in-house to every 6 'in-firm' (up from 1 in 12 just over 10 years ago) and significantly on an annual basis in-house exceeded 'in-firm' growth for the first time in the last five years:

2011-2015: 1 in-house: 6 in private practice in-house (983pa) exceeds private practice (962) growth for the first time 2006-2010: 1 : 9 Private practice growth 2x in-house 2001-2005: 1 : 12 Private practice growth 3.5x in-house 1996-2000: 1 : 13 Private practice growth 8x in-house

ABSs &amp...

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