Law Firm Survival Index
59.8% of law firms survive five years, vs 38.4% across all industries
A sourced read on UK law firm survival rates, drawn from ONS Business Demography official open data. Covering SIC 691 (Legal activities) vs the all-industry benchmark across 2019 to 2023 birth cohorts.
Key findings
- Legal businesses (SIC 691) have a five-year survival rate of 59.8% for the 2019 birth cohort, versus 38.4% across all industries. That gap of around 21 percentage points is consistent across recent cohorts.
- One-year survival is similarly strong at 96.2%, above the all-industry rate of 94.6%. The gap is smaller at year one but widens materially by years three and five.
- The same pattern holds across 2019, 2020, and 2021 birth cohorts, all showing three-year survival above 72% for SIC 691 versus 53-56% all-industry. This suggests the outperformance is structural, not cohort-specific.
- The 2,375 legal businesses born in 2019 (SIC 691) compare with 363,825 across all industries. Legal accounts for a small fraction of total business births but a disproportionately high share of long-term survivors.
Source: ONS Business Demography 2024, Table 5.2a (SIC group survival, births 2019). Open Government Licence v3.0. Figures may be cited with attribution to Accounts for Lawyers.
Survival rates by year: legal activities vs all industry (2019 cohort)
The chart compares survival at one, three and five years for businesses born in 2019, contrasting SIC 691 (Legal activities, in crimson) with the all-industry average (in grey). The legal sector outperforms at every horizon, with the gap widening as time passes.
Survival by cohort (all available years)
The table shows survival data for SIC 691 (Legal activities) and the all-industry average for each birth year. Later cohorts have fewer follow-up years available. Five-year data exists only for the 2019 cohort.
| Cohort | Births | 1yr % | 2yr % | 3yr % | 5yr % |
|---|---|---|---|---|---|
| 2019 Legal (SIC 691) | 2,375 | 96.2% | 84.8% | 72.4% | 59.8% |
| 2020 Legal (SIC 691) | 1,960 | 95.9% | 84.2% | 74.0% | n/a |
| 2021 Legal (SIC 691) | 2,055 | 96.3% | 83.7% | 75.4% | n/a |
| 2022 Legal (SIC 691) | 1,915 | 96.3% | 86.4% | n/a | n/a |
| 2023 Legal (SIC 691) | 2,045 | 96.8% | n/a | n/a | n/a |
| 2019 All industry | 363,825 | 94.6% | 74.7% | 55.9% | 38.4% |
Source: ONS Business Demography 2024, Tables 5.2a-5.2e and Table 4.2. Open Government Licence v3.0. 5-year data available only for 2019 cohort; later cohorts have fewer follow-up years.
Methodology and sources
Data source. Survival rates are drawn from the ONS Business Demography 2024 reference table, specifically Tables 5.2a-5.2e (survival of newly born enterprises by SIC 2007 group) and Table 4.2 (survival by broad industry group). The ONS methodology counts businesses registered for VAT or PAYE and tracks whether they remain active in subsequent years. The source file is businessdemographyexceltables2024.xlsx, released 20 November 2025.
SIC classification. SIC 691 (Legal activities) is the most precise available breakdown for law firms in this dataset. SIC 69 (Legal and accounting activities) is a broader grouping that combines SIC 691 with SIC 692 (accountancy). The headline figures on this page use SIC 691 for maximum specificity.
Caveats. The ONS data covers businesses registered for VAT or PAYE, so very small unregistered businesses below the VAT threshold may be underrepresented. Survival means remaining registered, not profitable. The 2019 cohort includes businesses that entered the pandemic; some sectors show distorted patterns due to government support schemes which may have prolonged survival beyond what market conditions alone would have produced.
- ONS Business Demography Reference Table (Office for National Statistics)
Data is published under the Open Government Licence v3.0. Free to cite with attribution to Accounts for Lawyers.
Supporting the financial health of your law firm
High survival rates reflect a resilient sector, but survival and profitability are not the same thing. Cash flow, partner drawings, WIP management and tax efficiency are the levers that separate a profitable practice from one that merely survives. Our team works exclusively with solicitors and law firms.
Frequently asked questions
How do law firm survival rates compare to other businesses?
Legal activities businesses (SIC 691) have consistently higher survival rates than the all-industry average. For businesses born in 2019, 96.2% survived one year, 84.8% survived two years, 72.4% survived three years, and 59.8% survived five years. The equivalent all-industry figures were 94.6%, not separately available, 55.9%, and 38.4%. The gap widens at longer time horizons: by year five, legal businesses survived at a rate roughly 21 percentage points above the national average.
What does the ONS Business Demography dataset measure?
The ONS Business Demography series tracks the birth, death, and survival of UK businesses registered for VAT or PAYE. Businesses are categorised by their SIC 2007 code. Survival is measured by checking whether a business active at birth was still active in each subsequent year. The data covers England, Wales, and Scotland (Great Britain). SIC 691 (Legal activities) includes barristers, solicitors, and other legal businesses. The dataset is published annually by the ONS under the Open Government Licence v3.0.
Why do law firms have above-average survival rates?
Legal businesses tend to have higher barriers to entry (professional qualifications, SRA regulation, indemnity insurance) which filter out marginal entrants. Repeat client relationships and referral networks create stable revenue streams. The combination of professional regulation and client loyalty means that law firms, once established, tend to persist. However, survival does not mean profitability: a firm may still be trading but not growing. The data covers all legal businesses including sole practitioners and small consultancies, not just large partnerships.
What does the 2020 cohort data show?
Businesses born in 2020 showed one-year survival of 95.9% for legal activities, broadly in line with the 2019 cohort. Three-year survival was 74.0% for legal activities (SIC 691), also above the all-industry average of around 53%. The 2020 cohort launched during the pandemic, when business births fell across most sectors. The legal sector proved relatively resilient, and firms that started in 2020 appear to have performed similarly to pre-pandemic cohorts.
Does high survival mean law firms are low risk?
Higher-than-average survival rates are a positive signal, but they do not eliminate business risk. Cash flow is a significant pressure in law firms: slow-paying clients, WIP funding gaps, and client account compliance requirements all create financial strain even in profitable practices. Professional indemnity insurance costs, SRA regulation changes, and market consolidation are ongoing pressures. The survival data should be read as one indicator of sector resilience, not a guarantee of individual practice success.