Table of Contents
Executive Summary
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- The market
- Legal services market shows robust performance over 2017 and 2018
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- Figure 1: Turnover of UK legal services industry, 2014-18
- Increased demand for more diverse and non-traditional legal services
- Investment in cutting-edge technology set to remain key priority for legal services providers
- But legal services sector has been slow in adopting Lawtech
- Turnover of UK legal services industry set for moderate annual real-terms growth to 2023
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- Figure 2: Forecast turnover of the UK legal services industry, 2019-23
- Companies and brands
- Nearly half of law firms set up as corporate entities
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- Figure 3: Breakdown of solicitor firms in England and Wales, March 2019
- Increased focus on tight cost control sees providers expand use of low-cost hubs
- What we think
Issues and Insights
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- Legal services providers face competition from accountancy firms
- The facts
- The implications
- Legal services sector under increased pressure to adopt Lawtech
- The facts
- The implications
The Market – What You Need to Know
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- Legal services market shows robust performance over 2017 and 2018
- Providers need to become more efficient as clients expect better value and fixed prices
- Investment in cutting-edge technology set to remain key priority for legal services providers
- Turnover of UK legal services industry set for moderate annual real-terms growth to 2023
Market Size
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- Overview
- Legal services market shows robust performance over 2017 and 2018
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- Figure 4: Turnover of the UK legal services industry, 2014-18
- Figure 5: Turnover of UK legal services industry, 2014-18
- UK legal services sector enjoys strong position in the global market
- The rise in alternative legal services providers
- New business models evolve in response to market liberalisation, increased price pressure and changing customer demands
- Large accountancy firms present threat to mid-market legal services firms
Market Segmentation
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- Market segmentation by profession
- Solicitors account for the majority of turnover in the UK legal services sector
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- Figure 6: Turnover of UK legal services industry, by type of business, 2014-18
- Segmentation by category of work (solicitors only)
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- Figure 7: Turnover of UK solicitor firms, by type of work, 2018
- Figure 8: Turnover of UK solicitor firms, by type of work, 2018
- Private practices face increased competition from in-house teams
- Demand for legal services by end-use sector
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- Figure 9: Top sources of business demand for legal services, (% of total UK business sales)
- Conveyancing market
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- Figure 10: Average number of transactions by conveyancing firms, 2015-18
- Wills and probate
- DIY probate gains in popularity, but opportunities for professionals remains
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- Figure 11: Grants of probate issued in England and Wales, 2013-18
- Over half of adults in the UK have yet to make a will
- Solicitors continue to dominate the will-writing market, but DIY and online will-writing services gain in popularity
- Law Commission consults on ways to make it easier for people to make wills and to pave way for electronic wills
- Personal injury
- Major reforms to drive consolidation and restrict market growth
- Other areas of work
- Employment law
- Family law
- Regional analysis
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- Figure 12: Regional analysis of the UK legal services sector, 2017
- Overseas trade in legal services
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- Figure 13: International trade in legal services, 2013-17
- Figure 14: Net exports of legal services, 2008-16
Market Forecast
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- The market 2019-23
- The impact of Brexit
- Turnover of UK legal services industry set for moderate annual real-terms growth to 2023
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- Figure 15: Forecast turnover of the UK legal services industry, 2019-23
- Figure 16: Forecast turnover of the UK legal services industry, 2019-23
Market Trends
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- Increased demand for more diverse and non-traditional legal services
- Trend towards unbundling of legal services requires providers to develop new service delivery models and invest in new skills
- Clients expect better value and fixed prices
- Legal services providers face competition from accountancy firms
- Growth in DIY law set to continue
Lawtech Adoption in the Legal Services Sector
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- Investment in cutting-edge technology set to remain key priority for legal services providers
- ‘Big four’ at forefront in investing in Lawtech….
- …while traditional providers are slow to adopt efficiency-promoting technology
- Thriving Lawtech start-up activity, especially in London
- Adoption of Lawtech will increase demand for new types of skills
- Blockchain in the legal sector
Regulatory and Legislative Changes
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- Industry regulation
- Legal Services Act
- Legal Services Act opens up market to non-lawyers and leads to the creation of new business models
- SRA relaxes the Separate Business Rule, making it easier for solicitors to provide other professional services
- SRA gives green light to freelance solicitors and solicitors in unregulated firms
- CMA concludes that the legal market is not working well for consumers and small businesses
- CMA sets out package of measures aimed to help customers better navigate the market and get value for money
- SRA makes published prices for certain legal services mandatory
- Legal Aid, Sentencing and Punishment of Offenders Act results in significant cuts in legal aid funding
- Government publishes post-implementation review of LASPO
- Court modernisation programme will introduce new technology, working practices and shrink the court estate
- Steep rise in court fees could discourage people from bringing legitimate cases
- Government proposes controversial reforms to probate fees
Market Drivers
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- Residential and commercial property transactions
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- Figure 17: UK residential property transaction completions, by country, 2014-18
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- Figure 18: UK residential property transaction completions, 2014-18
- Figure 19: UK non-residential property transaction completions, by country, 2014-18
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- Figure 20: UK non-residential property transaction completions, by country, 2014-18
- Trends in M&A activity
- UK M&A market remains resilient despite uncertain economic and political backdrop
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- Figure 21: Mergers and acquisitions involving UK companies, 2005-18
- Number of listed companies on a downward trend
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- Figure 22: Number of main market and AIM listed companies, 2008-18
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- Figure 23: Number of main market and AIM listed companies, 2010-18
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- Figure 24: Number of company IPOs on London Stock Exchange, 2012-18
- Rise in active businesses as UK economic recovery becomes more robust
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- Figure 25: Number of private sector businesses in the UK, 2004-18
- Figure 26: Number of private sector businesses in the UK, 2004-18
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- Figure 27: Number of VAT and/or PAYE registered enterprises in the UK, by industry group and turnover size band, 2017, (Number and £000)
Companies and Brands – What You Need to Know
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- Changing customer demand leads to emergence of innovative business models
- Increased focus on tight cost control sees providers expand use of low-cost hubs
- HSF’s global alternative legal services business offers cost efficient legal products and technology services for clients
- Clifford Chance launches Tech Group to help businesses in all industries tackle the risks and opportunities that technology brings
- Linklaters enhances cross-border aspects and integrates multi-practice teams in response to the growing international needs of clients
- Legal services providers become more sector-focussed
Industry Structure
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- Industry development
- International legal services firms in London
- Top 20 commercial legal firms
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- Figure 28: UK top commercial law firms, by turnover, 2018
- The rise of alternative legal services providers
- Structure of UK legal activities industry
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- Figure 29: Analysis of the changes in the structure of the UK legal activities industry, 2014-18, (number of local units and businesses)
- Solicitor firms
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- Figure 30: Number of practising solicitors in the UK, 2011-17, (number and % change)
- Figure 31: Population of practising solicitors, 2014-19
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- Figure 32: Breakdown of solicitor firms, by type, March 2014 and February 2019
- Practising barristers
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- Figure 33: Total barristers in practice, 2013-18
- Structure by employment
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- Figure 34: Analysis of the employment structure of the UK legal activities industry, 2017 and 2018, (local units and employees)
- Structure by turnover
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- Figure 35: Analysis of the financial structure of the UK legal activities industry, 2017 and 2018, (£ 000 and number of companies)
Company Profiles
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- Allen & Overy
- Company strategy
- Advanced Delivery
- Harnessing technology and innovation
- Financial performance
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- Figure 36: Financial analysis of Allen & Overy, 2014-18, (£ million)
- Clifford Chance
- Company strategy
- Clifford Change launches new technology group to advise clients on the risks and opportunities that technology brings
- Financial performance
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- Figure 37: Financial analysis of Clifford Chance, 2013-17, (£ million)
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- Figure 38: Turnover analysis of Clifford Chance, by geographic segment, 2018 (% of turnover)
- CMS Cameron McKenna Nabarro Olswang
- CMS combines with Nabarro and Olswang in largest ever merger in UK legal services market
- Financial performance
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- Figure 39: CMS Cameron McKenna Nabarro Olswang, 2014-18 (£000)
- DLA Piper International
- DLA Piper announces launch of blockchain and digital assets practice
- Company strategy
- Financial performance
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- Figure 40: Financial analysis of DLA Piper International, 2013-17, (£ million)
- Freshfields Bruckhaus Deringer
- Freshfields moves support services to new global centre in Manchester
- Company strategy
- Financial performance
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- Figure 41: Financial analysis of Freshfields Bruckhaus Deringer, 2014-18, (£ million)
- Herbert Smith Freehills
- New global alternative legal services business launched in 2015
- Beyond 2020 global strategy
- Financial performance
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- Figure 42: Financial analysis of Herbert Smith Freehills, 2013-17, (£ million)
- Hogan Lovells International
- Company strategy
- Financial performance
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- Figure 43: Financial analysis of Hogan Lovells International, 2014-17, (£000)
- Linklaters
- Company strategy
- Financial performance
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- Figure 44: Financial analysis of Linklaters, 2013-17, (£ million)
- Norton Rose Fulbright
- Merger with US-based Chadbourne & Parke
- Company strategy
- Financial performance
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- Figure 45: Financial analysis of Norton Rose Fulbright, 2014-18, (£000)
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Methodology
Further Sources and 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 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
- Trade events
- LAW 2019
- London Law Expo ‘19
- Legalex 2019
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