14.5.13

Thousands of Lawyers Quit Amidst Financial Woes

Brought to you by our friends at Walker Prestons Solicitors

Almost 3% of lawyers in the UK could not afford to renew their practising certificates in December and have had their licences revoked. Just shy of 3,500 solicitors have decided to leave the profession according to finance provider Syscap.

It is reported that a combination of factors including banking difficulties, cuts in legal aid and the increasing costs of practising certificates have led to the widespread migration. The price for a single lawyer Practising Certificate was £1,561 in 2001. This price jumped to £2,201 in 2012, a rise of more than 35%. Despite this significant increase, Syscap chief executive Philip White described the revelation as surprising.

White reasoned: “The scale of this year’s exodus from the profession is surprising. It suggests that smaller law firms may be under more financial pressure than anyone thought. Stricter capital adequacy requirements have forced banks to rein in their lending to small businesses, and small law firms have been hit hard by this.”

With the banking industry embroiled in scandal and struggling with the double dip recession, cash injections have become incredibly difficult to come by. This has become a stumbling block for small, new businesses hoping to aid growth or continue trading at their current pace
This news comes during a difficult year for small law firms and personal injury solicitors. Changes to legal regulations have inhibited their business and may prohibit clients from seeking their services. The ban on referral fees has led to a reported 20% of law firms in the North West of the UK considering ceasing operation.

Law firms who help individuals make
claims for hearing loss, road accidents and injuries at work have been penalised by changes to the RTA Portal. These changes look set to make it far less financially rewarding for those seeking compensation, which could inhibit their desire to contact a law firm to work on their behalf.

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