More than 10,000 professional services providers, including legal firms, face insolvency

Around 200,000 British companies found themselves in financial strife in the last quarter, according to figures published yesterday by Begbies Traynor, the insolvency specialist.

Unhappily, professional services is among the sectors struggling most, Law Central can reveal.

The number of professional services firms with "significant" financial problems increased 51 per cent over the past 12 months, Begbies said, with 10,727 firms in difficulty. A further 141 were in a "critical" situation and faced going out of business.

The figures cover a range of professional services providers, from accountants to architects, but also include a number of legal services firms, including patent and copyright agents, arbitrators, claims handlers and other legal support services.

Taken as an indicator of the legal sector at large, it's further evidence of how grim it is getting out there.

"Not even the previous financial bastion of professional services firms, such as accountants and lawyers, is going to see itself spared as the recession ploughs on," Nick Hood, a partner at Begbies, said.

Begbies defines companies with "significant" problems as those with either a court action against them or poor, insolvent or out-of-date accounts. Companies with "critical" problems, on the other hand, are those with county court judgments of more than £5,000 against them and/or winding-up actions.

A significant number of companies tagged with a red flag alert end up in insolvency proceedings within a year.