Table of Contents
Executive Summary
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- The market
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- Figure 1: Turnover of UK legal services industry, 2013-17
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- Figure 2: Turnover of UK solicitor firms, by type of work, 2017
- Market factors
- Companies
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- Figure 3: Breakdown of Solicitor Firms, March 2014 and February 2018
- What we think
Key Insights
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- What are the implications of Brexit on the legal services market?
- What role does technology and innovation play in 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?
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 2016-22
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- Figure 5: Output components percentage contribution to UK GDP growth, quarteronquarter, 2016-17
- Inflation
- Interest rates
- House prices
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- Figure 6: UK House price changes, 2007-2017
- Consumer spending
- Manufacturing
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- Figure 7: UK manufacturing, 2015-18
- Business investment
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- Figure 8: UK GFCF, chained volume measures, seasonally adjusted, 2004-17
- 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
- Government consults on 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 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
- 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 9: UK residential property transaction completions, by country, 2013-17
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- Figure 10: UK residential property transaction completions, 2013-17
- Figure 11: UK non-residential property transaction completions, by country, 2013-17
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- Figure 12: UK non-residential property transaction completions, 2013-17
- Trends in M&A activity
- UK M&A market remains resilient in 2017, despite uncertain economic and political backdrop
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- Figure 13: Mergers and acquisitions involving UK companies, 2005-17
- Number of listed companies on a downward trend
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- Figure 14: Number of main market and AIM listed companies, 2009-17
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- Figure 15: Number of main market and AIM listed companies, 201017
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- Figure 16: Number of company IPOs on London Stock Exchange, 201217
- Rise in active businesses as UK economic recovery becomes more robust
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- Figure 17: Number of private sector businesses in the UK, 2003-17
- Figure 18: Number of private sector businesses in the UK, 2003-17
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- Figure 19: Number of VAT and/or PAYE registered enterprises in the UK, by industry group and turnover size band, 2017
- Public and political scrutiny surrounding corporate tax
- Measures put in place to crack down on tax avoidance
- Finance Bill 2017-18
Market Size
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- Key points
- Overview
- Legal services sector is undergoing a period of significant change
- The rise in alternative legal services providers (ALSP)
- New business models are evolving in response to increased price pressure and changing customer demands
- Mid-tier firms emerged stronger following the recession....
- ...But large accountancy firms present threat to mid-market
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- Figure 20: Turnover of the UK legal services industry, 2013-17
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- Figure 21: Turnover of UK legal services industry, 2013-17
Market Segmentation
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- Key points
- Market segmentation by profession
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- Figure 22: Turnover of UK legal services industry, by type of business, 2013-17
- Segmentation by category of work (solicitors only)
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- Figure 23: Turnover of UK solicitor firms, by type of work, 2017
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- Figure 24: Turnover of UK solicitor firms, by type of work, 2017
- Figure 25: 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 26: Top sources of business demand for legal services
- Conveyancing market
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- Figure 27: Average number of transactions by Conveyancing firms, 201117
- Wills & Probate
- DIY probate gains in popularity, but opportunities for professionals remains
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- Figure 28: Grants of probate issued in England and Wales, 2012-17
- Around 60% of adults in the UK have yet to make a will
- Law Commission consults on ways to make it easier for people to make wills and to pave way for electronic wills
- Ongoing debate on whether will-writing should be regulated
- Personal injury
- Major reforms to drive consolidation and restrict market growth
- Proposed introduction of fixed legal fees for clinical negligence
- Other areas of work
- Employment law
- Family law
- UK pilots ‘digital divorce’ scheme
- Regional analysis
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- Figure 29: Regional analysis of the UK legal services sector , 2016
- Overseas trade in legal services
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- Figure 30: International trade in legal services, 2009-16
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- Figure 31: Net exports of legal services, 200816
Market Trends
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- Key points
- Law firms incorporate non-traditional legal services
- Efficiency drive set to continue as clients expect better value and fixed prices
- Legal service providers face increased competition from accountants
- Investment in cutting-edge technology set to remain key priority for legal services providers
- Growth in DIY law set to continue
- SME business sector offers growth potential
Industry Structure
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- Key points
- Industry development
- Despite increased consolidation, the sector remains highly fragmented
- UK law firms can be broadly categorised as follows:
- Rise in the number of overseas law firms in London
- Top 20 commercial legal firms
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- Figure 32: UK top commercial law firms, by turnover, 2017
- Structure of UK legal activities industry
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- Figure 33: Analysis of the changes in the structure of the UK legal activities industry, 2013-17
- Solicitor firms
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- Figure 34: Number of practising solicitors in the UK, 2011-17
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- Figure 35: Population of Practising Solicitors, 201318
- Figure 36: Breakdown of Solicitor Firms, by type, March 2014 and February 2018
- Practising barristers
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- Figure 37: Total barristers in practice, 2012-17
- Structure by employment
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- Figure 38: Analysis of the employment structure of the UK legal activities industry, 2016 and 2017
- Structure by turnover
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- Figure 39: 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
- Harnessing technology and innovation
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- Figure 40: Financial Analysis of Allen & Overy, 2013-17
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- Figure 41: Allen & Overy practice breakdown by sector, 2017
Clifford Chance
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- Company strategy:
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- Figure 42: Financial Analysis of Clifford Chance, 2013-17
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- Figure 43: Turnover analysis of Clifford Chance, by geographic segment, 2017
CMS Cameron Mckenna Nabarro Olswang
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- Figure 44: Financial Analysis of CMS Cameron McKenna Nabarro Olswang , 2013-17
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Dentons UK and Middle East
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- Company strategy:
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- Figure 45: Financial Analysis of Dentons UK and Middle East , 2013-17
DLA Piper International
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- Company strategy:
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- Figure 46: Financial Analysis of DLA Piper International, 2013-17
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- Figure 47: Turnover analysis of DLA Piper International, by geographic segment, 2015
Freshfields Bruckhaus Deringer
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- Company strategy:
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- Figure 48: Financial Analysis of Freshfields Bruckhaus Deringer, 2013-17
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 49: Financial Analysis of Herbert Smith Freehills, 2013-17
Hogan Lovells International
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- Company strategy:
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- Figure 50: Financial Analysis of Hogan Lovells International, 2012-16
Linklaters
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- Company strategy:
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- Figure 51: Financial Analysis of Linklaters, 2013-17
Norton Rose Fulbright
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- Company strategy:
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- Figure 52: Financial Analysis of Norton Rose Fulbright, 2013-17
Slaughter and May
Market Forecast
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- Key points
- The Market 2018-22
- The Brexit effect
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- Figure 53: Forecast turnover of the UK legal services industry, 2018-22
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- Figure 54: Forecast turnover of the UK legal services industry, 2018-22
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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