The report -- A time of change: solicitors' firms in England and Wales – was the first of its kind and brought together the Law Society, the Legal Services Board and the Ministry of Justice, according to society’s website.

Market changes

The massive survey took in the views of more than 2,000 law firms in the jurisdiction, investigating  how solicitors' firms of all types are performing in the context of the economic downturn, market changes, regulatory developments and legal aid reforms.
The highest percentage of firms flagged compliance with regulations as their main problem (29 per cent), while responding to market competition (23 per cent), adapting to changes in legal aid (23 per cent), and in securing finance (21 per cent) also ranked high.

Alerternative solutions

More than 40 per cent of law firms reported a decrease in turnover in the past three years, compared to 32 per cent reporting an increase and 27 per cent reporting no change. The survey revealed that smaller and medium-sized firms are significantly more likely to have reported decreases in turnover.
The report also found that 6 per cent of firms signalled an interest in seeking external investment under alternative business structure (ABS) provisions.
Des Hudson, the chief executive of the society – the trade union for the nearly 120,000 practising solicitors in England and Wales – commented: 'Solicitor-led firms are the single largest group of suppliers of legal services. Understanding how these firms structure themselves and deliver services is vital to understanding the market as whole.'

Financial performance

Chris Kenny, the chief executive at legal services umbrella regulator, the Legal Services Board, added: 'The results of the survey confirm the diversity of firms in terms of their financial performance, the very different things they do for very different consumers, and the fact that many firms mix up different market segments, all of which tests the assumption that all firms face the same challenges. It also shows that a significant proportion of these firms are performing well, despite tough economic conditions.
'The findings also outline the reality that competition exists in legal services, with some firms doing better than others across all the different market segments – just like in most other sectors.'