Largest law firms grow as smaller firms decline

The 15 largest law firms in the Republic employ more than twice as many solicitors as they did in 2007, a new report shows. However, it has found the solicitors’ profession more broadly has not been sheltered or protected from the recession, with small practices facing the greatest pressures.

The report, prepared by economic consultancy firm Fitzpatrick Associates for the Law Society, which represents solicitors, found gross incomes for self-employed solicitors fell 43 per cent from 2007 to 2012.

The greatest declines were outside Dublin, with incomes in the Border region, the midlands and the west falling by as much as 53 per cent.

The analysis, which drew on the Central Statistics Office, the Department of Social Protection, the World Bank and other sources, found there was a fivefold increase in the number of legal professionals receiving unemployment benefit or assistance from 2006-2009.

Overall, the number of practising solicitors has grown 24 per cent since 2006. The increases are not evenly spread, however, with the numbers outside Dublin declining in many of the years 2006-2014.

There are 2,176 law firms in the Republic, the largest 15 of which employ about 22 per cent of practising solicitors. Most firms are small, with the majority having just one practising solicitor, and a high proportion have just two. Firms with five or fewer solicitors make up 92 per cent of the total.

The number of firms has declined each year since 2009, with significant growth in large firms but a mixed picture for medium or smaller firms.

‘Extreme price competition’

The report said midsize firms may have suffered from the investment and construction decline as well as “extreme price competition” from larger firms, while the growth of large firms was also a reflection of the diversity of their work and the international focus.

“As well as growing numbers of large firms there has also been significant growth within them,” the report found. “The largest 15 law firms employed more than twice as many solicitors in 2014 than in 2007.”

It paints a picture of a diverse sector made up of firms that vary hugely in size, specialise in different areas and have different client mixes.

It notes that the collapse of the property market had a direct effect on conveyancing, especially for small and local solicitors who depended on it, while related business linked to construction or investments saw a similar “devastating” collapse in demand.