Entry, exit and firm restructuring are important aspects of the ability of any market to respond and adapt to changing circumstances. The capacity to respond and adapt relatively quickly – often referred to as flexibility – is important for the effective performance of a market, particularly in periods of substantial change.
The study is concerned chiefly with barriers to entry, exit and ‘mobility’ (which includes business restructuring such as a merger) that may be caused or exacerbated by regulatory requirements, with particular reference to the barriers facing small solicitors’ practices. The approach adopted was based on a combination of desk research and 34 interviews with a range of people who are knowledgeable about the relevant market and market segments (including regulators, professional bodies, insurers, and advisors/consultants to law firms, as well as a number of regulated firms themselves). This exercise was supplemented, largely for purposes of cross-checking, by information drawn from three small scale surveys of legal practices, which produced 101 responses in total.