Research by the Solicitors Regulation Authority (SRA) indicates that 53 per cent of firms south of the border are limited companies – an increase of about 90 per cent over the past decade.

A change to corporation tax, however, could reverse that trend.

A report from the SRA ascribes the change in preferred business vehicles to a reduction in corporation tax, which fell from 24 per cent in 2012 to 19 per cent in 2017.

Moreover, the tax rate on dividends paid to shareholders in limited companies was lower than that which was paid on the profits of limited liability partnerships or members of traditional partnerships.

The data show that 52.6 per cent of solicitors’ firms are incorporated companies. This group is followed by sole practitioners, at 18.5 per cent. LLPs account for 15.3 per cent of firms and traditional partnerships for 13.2 per cent.

The report states that partners who were shareholders in limited company law firms had “benefited from a noticeable tax advantage over recent years”, which had “allowed them to enjoy a greater share of their firms’ profits than partners in traditional partnerships or LLPs”.

Report authors Hazlewoods, an accountancy firm, noted that the tax benefits for law firms was set to end next April as the UK plans to raise corporation tax to 25 per cent for companies with profits over £250,000.