UK legal services market revenue tops 35bn in 2018 and annual growth of over 5% forecast for the next few years amid growing practitioner confidence
Now in its 9th annual edition, the UK Legal Services Market Trends Report provides a unique detailed market review and analysis of the UK legal services market:
- The UK legal services market was valued at 35.1bn in 2018, increasing by 6.3% at current prices on the previous year. When inflation is taken into account then market value increased by 3.7% (constant prices).
- The number of law firms in the UK has stabilised in recent years at around 12,000, although the business model is changing: almost half of all firms are now incorporated companies and the traditional partnership model has declined dramatically. There are almost 1,300 firms operating as Alternative Business Structures (ABS) in England and Wales, compared to an overall total of over 10,000 law firms in England and Wales.
- Revenue growth for the top 100 law firms continues to outperform growth in the legal market overall. This is due to a number of factors: acquisitions by the top 100 firms have grown sales; most of their work is in the corporate sector which is performing better than most consumer law sectors; a significant percentage of the revenue of the top 100 comes from overseas.
- By far the largest segment in the UK market is legal work for business and commercial affairs (including commercial property) accounting for almost half of total market revenue in 2018 (nearly 47%) and most of the high-value work in this segment is undertaken by the larger law firms. The largest consumer law segment is personal injury/accident/medical negligence work contributing an estimated 11% of UK market revenue, despite the sector facing falling claims numbers and the repercussions of the ban on referral fees.
- This years report includes the third annual set of results from a survey of 176 legal practitioners working in four consumer law areas: conveyancing; family law; personal injury; wills and probate. Over the last year, the majority of those working in consumer law have experienced volume growth in their practice area. Looking ahead to the next 12 months, over six out of ten firms are expecting to witness volume growth in their practice area, and this increases to 74% of family law practitioners.
- Our revenue growth forecast for UK legal services market in 2019 is 5.4% (at current prices) and year-on-year growth of between 5% and 6% is expected from 2019 to 2022.
Looking ahead to the next 12 to 18 months, some key changes likely to have an impact on the market are:
- Price transparency will increase as more legal services providers are required to publish prices on their websites.
- The move to online legal services provision is set to increase as the MoJ extends its digital options for both consumers and legal services providers. This, in turn, is likely to weaken the demand for professional legal advice as more consumers go it alone online. The increase in the small claims limit, in April 2020, will push even more consumers towards DIY law.
- Freelance solicitors, and qualified solicitors working in unregulated practices, will widen the choice for clients. Other impacts are likely to be more downward pressures on fees as freelance solicitors in particular benefit from lower overheads. There are also concerns that less regulation of these new suppliers could lower standards.
- More law firms and other companies in the legal space will look for a public listing, based on the success of those already listed.
- The transformation of more law firms from purely providers of legal services to professional services companies offering a range of services. This is already happening with some law firms obtaining a Stock Market listing, and some large personal injury firms expanding into other areas such as accident management, insurance, and medic legal services. However, it is starting to happen with smaller law firms as well as they join forces with accountants, estate agents etc.
- More litigation funders are likely to move into smaller cases, plus more consumer cases.
1. Executive Summary
2. Market Structure
- Most legal advisors are regulated
- Legal services market segments
- Little change in law firm numbers in 2018
- Chambers pass 400
- Licensed conveyancers
- Patent and trademark attorneys
- Cost lawyers
- Alternative Business Structures (ABS)
- Other providers of legal services
- Personnel numbers
3. Market Developments
- Brexit outcome still unclear but concerns about no-deal in the legal sector
- Published prices for certain legal services are here
- Government post-legislative review of LASPO finally published
- Green light for freelance solicitors and legal services from unregulated firms
- Roberton review of legal services in Scotland
- Pro bono advice on the increase
- Courts reform programme under more scrutiny
- Litigation funding's capital base increases significantly in 2018
- ABS sector - more licensing bodies and over 1,200 ABS
- AI in law - increased use but mixed views on impact
4. The Key Players
- The Top 100
- The Top 10
- Acquisitions and mergers
- Top 5 UK Law Firms - Profiles
- DLA Piper International LLP
- Clifford Chance LLP
- Hogan Lovells
- Allen & Overy LLP
- Linklaters LLP
- Listed law firms and others
- Gateley PLC
- Gordon Dadds PLC
- Keystone Law Group PLC
- Knights PLC
- NAHL Group PLC
- Rosenblatt Group PLC
- Consumer law firms
- Cooperative Legal Services
- Irwin Mitchell
- Simpson Millar
- Slater & Gordon (UK)
5. Market Size And Trends
6. Market Segmentation
- Corporate, financial and commercial law
- M&A activity
- Company formations and insolvencies
- Commercial Court
- International litigation and dispute resolution
- Personal injury
- Commercial and residential property, including conveyancing
- Wills, trusts and probate
- Family law
- Employment law
- Criminal law
7. Practitioner Research
- Improved volume growth in 2018 and the next 12 months
8. The Future
- Still an uncertain future
- Summary Prospects
9. Professional Bodies & Regulatory Authorities
For more information about this report visit https://www.researchandmarkets.com/research/pcpfrc/uk_legal_services?w=4