The fall in the number of legal firms and private solicitors in England and Wales is proof that competition in the sector is tougher than ever, head of the Law Society says.

Chief Executive Desmond Hudson said the economic recession, coupled with significant changes in the sector, was having a ‘major impact’ on business models.

According to the Law Society report, the number of practising certificate (PC) holders increased by just 0.25% in the 12 months to July 2012 – the smallest increase since 1996.

The figures contrast sharply with previous trends. Overall, since 1982, the total number of practising certificate holders increased by 208.5%, an average annual rate of 3.8%.

Fareeda Jaleel, founder of FRJ Business and Marketing Solutions, said the survey reiterated the need for firms to evolve in order to survive in a difficult economic climate.

‘This survey is proof that law firms must have a clear understanding of the numbers in their business,’ she said.

‘It is no good sitting on your laurels. Proper thought and consideration must be given to the business model and future planning if success is to be secured in the long term.’