Yorkshire’s legal sector ‘returns to solid growth’

However, the study also warned that traditional law firms still face competition from new entrants and pricing pressures. According to PwC’s Law Firm Survey, 77 per cent of northern law firms believe the sector will grow in the next three years, up from 50 per cent in 2013.

Previous surveys had shown that law firms’ results were badly affected by the economic downturn and an over-supply of firms offering legal services.

However, the 2014 survey suggests that the legal sector has benefited from the economy’s return to growth and consolidation in the market.

David Thurkettle, PwC’s law firm advisory group leader in Yorkshire, said: “With clear evidence of improving economic conditions, our 2014 law firms survey confirms that a degree of stability and confidence is returning to the legal sector across the north.”

However, Mr Thurkettle warned that challenges still exist.

He added: “Pricing pressures, mergers and acquisitions, alternative business models, talent wars and data security threats are just some of the issues that this year’s survey brings to the fore.”

UK profit per equity partner (PEP) has improved across all firms, with the Top 10 average exceeding the £1m barrier for the first time since 2008 – however, more than half of the year-on-year increase was driven by a five per cent reduction in full equity partner headcount.

Iain Clacher, an associate professor at Leeds University Business School, said: “The latest report from PwC is very good news for law firms outside of London. The increase in fees is in part attributable to increased corporate activity and there are some large corporate IPOs (initial public offerings) taking place, all of which are good for legal firms. However, as the IPO market, and corporate market more generally, starts to look a little more risky, and there are a number of signs that this is the case, the sustainability of these growth figures may not be as strong.”

Philip Jordan, the president of Leeds Law Society, said yesterday: “The road to economic recovery will no doubt be long, but the Leeds Law Society is confident that our region can once again be considered a legal hub, with Leeds at its centre.”