The number of lawyers working at fee-share law firms has increased by 45% in only three years, research has found.
Although the top five firms accounted for almost 59% of lawyers at the firms, it said “fragmentation continues” and there was a “long tail” of smaller operators.
Digital law firm arch.law – which operates a fee-share model itself – said that, although the number of lawyers continued to show double-digit percentage growth year-on-year, it had slowed from 21% in 2020-21 to 12% in 2021-22 as the wider shift to remote working practices has reduced momentum.
Meanwhile, the sector “enjoyed a degree of stability”, with the number of firms qualifying for the survey staying the same at 34 thanks to six new entrants to the market. The number at lawyers at those firms grew from 1,932 in 2020 to 2,457 in 2021 and 2,792 in 2022.
The top five firms by size – Keystone Law (470 lawyers), Setfords (460), gunnercooke (321), Taylor Rose MW (269) and Excello Law (123) – worked with 59% of the total of lawyers. Spencer West was sixth with 122 lawyers.
The research said there was “a long tail of smaller operators”, with 60% having fewer than 50 lawyers and 41% fewer than 30.
“The larger firms remain the preferred destination for many risk-averse lawyers, but we anticipate a number of firms in the next tranche will continue to grow over the next 12 months as advisors look for environments that provide a focus on culture and values whilst ensuring a safe platform for them to work and grow.”
In terms of new recruits, Setfords led the way by far in recruiting 132 in the past year, followed by Spencer West with 28, Richard Nelson with 24 (taking it to 48 in total), arch.law with 21 (also 48) and Acuity Law with 20 (97 in total).
Andrew Leaitherland, chief executive of arch.law, said the results showed that the model continued to “gain in popularity with lawyers and advisers who don’t feel as though the traditional law firm model works for them anymore”.
He went on: “The quality and quantity of legal work delivered by these platform law firms continues to develop and their clients often operate in the mid-market, making them more orientated to a specific adviser rather than a law firm brand.
“Advisers can therefore have greater confidence that their clients will move to support them, as opposed to large institutional clients who are likely to retain the services of a large law firm.”
Similar research last month from Codex Edge predicted that up to a quarter of lawyers could work at fee-share law firms within the next three years at current rates of growth.