Table of Contents
Executive Summary
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- The market
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- Figure 1: Turnover of UK legal services industry, 2012-16
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- Figure 2: Turnover of UK solicitor firms, by type of work, 2016
- Market factors
- Companies
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- Figure 3: Breakdown of solicitor firms, March 2014 and February 2017
- What we think
Key Insights
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- What are the implications of Brexit on the legal services market?
- Is the move by the big accountants into legal services posing a threat to traditional firms?
- Is the trend towards unbundling of legal services set to continue?
- What are the current technological developments in the legal services market?
Introduction
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- Definitions
- Methodology
- Abbreviations
- Market positioning
UK Economy
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- Overview
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- Figure 4: Forecast GDP development, 2017-21
- Figure 5: UK GDP quarterly development, 2003-16
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- Figure 6: UK GDP in economic downturns and recoveries since 1979
- Inflation
- Interest rates
- House prices
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- Figure 7: UK House price changes, 2004-16
- Consumer spending
- Manufacturing
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- Figure 8: UK manufacturing, 2014-16
- Business investment
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- Figure 9: UK GFCF 2003-16
- Imports
- Exports
Market Factors
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- Key points
- Regulation and government policy
- The Legal Services Act 2007
- Legal Services Act opens up market to non-lawyers
- Barriers for ABS to be further reduced to boost competition
- The Solicitors Regulation Authority (SRA) relaxes the Separate Business Rule, making it easier for solicitors to provide other professional services, such as accounting
- SRA proposes to remove further restrictions for solicitors in its phased review of the SRA Handbook
- CMA concludes that the legal market is not working well for consumers and small businesses
- Legal Aid, Sentencing and Punishment of Offenders Act cuts legal aid funding
- Government scraps major reform of Legal Aid system in England and Wales
- Steep rise in court fees could discourage people from bringing legitimate cases
- Nearly a fifth of all courts and tribunals in England and Wales to close
- Other factors
- Residential and Commercial Property Transactions
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- Figure 10: UK residential property transaction completions, by country, 2012-16
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- Figure 11: UK residential property transaction completions, 2012-16
- Figure 12: UK non-residential property transaction completions, by country, 2012-16
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- Figure 13: UK non-residential property transaction completions, 2012-16
- Trends in M&A activity
- UK M&A market remains resilient in 2016, with a weaker sterling attracting foreign investment
- Brexit-induced uncertainty to potentially result in slowdown in M&A activity
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- Figure 14: Mergers and acquisitions involving UK companies, 2004-16
- Number of IPOS down in 2015 and 2016
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- Figure 15: Number of main market and AIM listed companies, 2009-16
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- Figure 16: Number of main market and AIM listed companies, 2009-16
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- Figure 17: Number of company IPOs on London Stock Exchange, 2011-16
- Rise in active businesses as UK economic recovery becomes more robust
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- Figure 18: Number of private sector businesses in the UK, 2002-16
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- Figure 19: Number of private sector businesses in the UK, 2002-16
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- Figure 20: Number of VAT and/or PAYE registered enterprises in the UK, by industry group and turnover size band, 2016
- Public and political scrutiny surrounding corporate tax
- Measures put in place to crack down on tax avoidance
- Finance Bill 2017
Market Size
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- Key points
- Overview
- Legal services sector has shown resilience in recent years, partly reflecting the UK’s strong standing in the global marketplace
- Legal services sector is undergoing a period of significant change
- Downward pressure on prices for legal services is forcing firms to evolve business models
- Mid-tier firms emerged stronger following the recession...
- ... but the mid-tier is becoming squeezed due to increased competition from large accounting firms and magic circle law firms
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- Figure 21: Turnover of the UK legal services industry, 2012-16
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- Figure 22: Turnover of UK legal services industry, 2012-16
Market Segmentation
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- Key points
- Market segmentation by profession
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- Figure 23: Turnover of UK legal services industry, by type of business, 2012-16
- Segmentation by category of work (solicitors only)
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- Figure 24: Turnover of UK solicitor firms, by type of work, 2016
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- Figure 25: Turnover of UK solicitor firms, by type of work, 2016
- Figure 26: Breakdown of UK solicitor firms, by type of work, as of April 2015
- Demand for legal services by end-use sector
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- Figure 27: Top sources of business demand for legal services
- Conveyancing market
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- Figure 28: Average number of transactions by conveyancing firms, 2011-16
- Wills & Probate
- Probate market sees shift towards DIY, but opportunities for professionals remains
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- Figure 29: Grants of probate issued in England and Wales, 2010-15
- MoJ announces major hike in probate fees in 2017
- Solicitors continue to dominate the will-writing market, despite unauthorised providers generally being cheaper
- Personal injury
- Recent reforms restrict growth potential of personal injury market
- Proposed introduction of fixed legal fees for clinical negligence
- Other areas of work
- Employment law
- Family law
- Regional analysis
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- Figure 30: Regional analysis of the UK legal services sector, 2015
- Overseas trade in legal services
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- Figure 31: International trade in legal services, 2008-15
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- Figure 32: Net exports of legal services, 2007-15
Market Trends
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- Key points
- Increased demand for non-traditional legal services
- Unbundling of legal services increasingly popular among corporate purchasers and the public
- Legal service providers need to become more efficient as clients expect better value and fixed prices
- Legal service providers face increased competition from accountants
- Some firms move towards more integrated service offerings
- Technological developments and innovation
- Growth in DIY law set to continue
- Online dispute resolution and proposed online court
- SME business sector offers growth potential
Industry Structure
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- Key points
- Industry development
- Legal service providers are highly diverse
- Rise in the number of overseas law firms in London
- Top 20 commercial legal firms
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- Figure 33: UK top commercial law firms, by turnover, 2016
- Structure of UK legal activities industry
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- Figure 34: Analysis of the changes in the structure of the UK legal activities industry, 2012-16
- Solicitor firms
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- Figure 35: Number of practising solicitors in the UK, 2011-16
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- Figure 36: Population of practising solicitors, 2011-17
- Figure 37: Breakdown of solicitor firms, by type, March 2014 and February 2017
- Practising barristers
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- Figure 38: Total barristers in practice, 2010-15
- Structure by employment
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- Figure 39: Analysis of the employment structure of the UK legal activities industry, 2015 and 2016
- Structure by turnover
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- Figure 40: Analysis of the financial structure of the UK legal activities industry, 2015 and 2016
Company Profiles
Allen & Overy
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- Company strategy:
- Advanced Delivery
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- Figure 41: Financial analysis of Allen & Overy, 2012-16
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- Figure 42: Allen & Overy practice breakdown by sector, 2015
- Figure 43: Allen & Overy practice breakdown by geographic segment, 2015
Clifford Chance
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- Company strategy
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- Figure 44: Financial analysis of Clifford Chance, 2012-16
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- Figure 45: Turnover analysis of Clifford Chance, by geographic segment, 2016
CMS Cameron Mckenna
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- Company strategy
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- Figure 46: Financial analysis of CMS Cameron McKenna, 2012-16
Dentons UKMEA
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- Company strategy
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- Figure 47: Financial analysis of Dentons UKMEA, 2012-16
DLA Piper International
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- Company strategy
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- Figure 48: Financial analysis of DLA Piper International, 2012-16
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- Figure 49: Turnover analysis of DLA Piper International, by geographic segment, 2015
Freshfields Bruckhaus Deringer
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- Freshfields opens Global Centre in Manchester
- Company strategy
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- Figure 50: Financial analysis of Freshfields Bruckhaus Deringer, 2012-16
Herbert Smith Freehills
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- New global alternative legal services business launched in 2015
- Beyond 2020 Global Strategy
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- Figure 51: Financial analysis of Herbert Smith Freehills, 2012-16
Hogan Lovells International
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- Company strategy
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- Figure 52: Financial analysis of Hogan Lovells International, 2012-16
Linklaters
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- Company strategy
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- Figure 53: Financial analysis of Linklaters, 2012-16
Norton Rose Fulbright
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- Company strategy
- Norton Rose Fulbright announces merger with Chadbourne & Parke in February 2017
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- Figure 54: Financial analysis of Norton Rose Fulbright, 2012-16
Slaughter and May
Market Forecast
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- Key points
- The Market 2017-21
- The Brexit effect
- Technological developments
- Trend towards fixed-fees services structure and unbundling of services set to continue
- Competition from non-legal firms set to further intensify
- CMA sets out package of measures for consumer and small business legal services sector to drive competition and consumer engagement
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- Figure 55: Forecast turnover of the UK legal services industry, 2017-21
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- Figure 56: Forecast turnover of the UK legal services industry, 2017-21
Further Sources & Contacts
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- Regulatory bodies and professional associations
- Advocate General for Scotland
- Solicitors Regulation Authority
- The Bar Council
- The Commercial Bar Association
- The Law Society
- The Law Society of Northern Ireland
- The Law Society of Scotland
- The Sole Practitioners Group
- Trade exhibitions
- LAW 2017
- London Law Expo ‘17
- Legalex 2017
- Trade magazines
- Lawyer Monthly
- Legal Business
- Legal Week
- New Law Journal
- Solicitors Journal
- The Journal of the Law Society of Scotland
- The Law Gazette
- The Lawyer
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