“Legal services providers continue to face increased competitive pressures, driven by new entrants, alternative providers, smart technologies, new business models, changing client buying patterns and new ways of working.
Corporate clients will continue to squeeze margins while pushing for better efficiency and the greater use of innovation. Thus, firms are having to look even closer at how to work more efficiently and reduce costs, with the integration of technology a key priority.
Commercial clients are also likely to be looking to keep more work in-house, as part of a drive for efficiency and cost savings, which will increase competition among legal services providers vying for commercial work.”
– Claudia Preedy, Principal Analyst
Key issues covered in this Report:
- How the market has performed during a succession of major external events including the pandemic and now heightened economic uncertainty
- Market drivers for the key B2B and B2C legal services sectors
- LawTech adoption in the legal services sector
- How providers are adapting to evolving consumer demands and increased competition
- Five-year market outlook
Collapse All
-
Overview
- Key issues covered in this Report
- Covered in this Report
-
Executive Summary
- The five-year outlook for the UK legal services sector
- Figure 1: Legal services outlook, 2023-28
- The market
- Legal services sector shows resilience, but firms are facing increased competitive pressures
- Figure 2: Turnover of UK legal services industry, 2018-22
- B2B work accounts for two thirds of solicitors’ turnover
- Figure 3: Turnover of UK solicitor firms, by type of work, 2022
- Uncertain economic climate to impact turnover growth in the near term
-
- Figure 4: Forecast turnover of the UK legal services industry, 2023-27
- Market trends
- Growing demand for integrated solutions and consultancy services
- Technology adoption to remain key priority for legal services providers
- Companies and brands
- More than half of law firms set up as corporate entities
- Figure 5: Breakdown of solicitor firms, by type, 2023
- UK firms continue to look for international expansion
- The five-year outlook for the UK legal services sector
-
Issues and Insights
- The rise of alternative legal services providers
- Investment in legal technology remains key priority for legal services providers
-
Market Size
- Overview
- Legal services sector shows resilience amid more uncertain economic climate
-
- Figure 6: Turnover of the UK legal services industry, 2018-22
- Figure 7: Turnover of UK legal services industry, 2018-22
- UK legal services sector enjoys strong position internationally
- UK firms continue to look for international expansion
- Market for alternative legal services demonstrates strong growth
- Increased use of ALSPs by UK law firms
-
Market Segmentation
- Market segmentation by profession
- Solicitors account for the majority of turnover in the UK legal services sector
- Figure 8: Turnover of UK legal services industry, by type of business, 2018-22
- Segmentation by category of work (solicitors only)
-
- Figure 9: Turnover of UK solicitor firms, by type of work, 2022
- Figure 10: Turnover of UK solicitor firms, by type of work, 2022
- Corporate law departments look to handle more work in-house
- Demand for legal services by end-use sector
- Figure 11: Top sources of business demand for legal services 2019 (% of total UK business sales)
- Conveyancing market
- Fall in the number of firms but rising transaction volumes over last decade
-
- Figure 12: Average number of transactions by conveyancing firms, 2019-23
- Price remains the most important factor when choosing conveyancing service provider
- Wills and probate
- Four in 10 grants of probate issued are through personal application
-
- Figure 13: Grants of probate issued in England and Wales, 2018-22
- The majority of adults have yet to make a will
- Demand for online/digital wills is on the rise
- Digital transformation of wider market
- Personal injury
- Reforms drive consolidation as market shrinks
- Motor claims fall as self-representation remains low
- Firms adopt new business models and embrace technology for post-whiplash reforms strategies
- PI claims fall by 43% between 2017 and 2022
-
- Figure 14: Personal injury claims issued in county and magistrates’ courts in England and Wales, 2015-22
- Other areas of work
- Employment law
-
- Figure 15: Number of employment tribunal receipts, 2012-22
- Family law
- Move to online divorce services
- New ‘no-fault divorce’ rule leads to surge in divorce applications
- Regional analysis
-
- Figure 16: Regional analysis of the UK legal services sector, 2020
- Overseas trade in legal services
-
- Figure 17: International trade in legal services, 2017-21
- Figure 18: Net exports of legal services, 2017-21
-
Market Forecast
- The five-year outlook for UK legal services
- Figure 19: Legal services outlook, 2023-28
- The market 2023-28
- Forecast turnover of UK legal services industry
- Figure 20: Forecast turnover of the UK legal services industry, 2023-27
- Forecast methodology
- The five-year outlook for UK legal services
-
Market Trends
- Growing demand for integrated solutions and consultancy services
- Increased collaboration with alternative legal services providers
- Opportunities to better meet the legal needs of people and SMEs through technology
- Unbundling of legal services
- Fixed-fee models become more prevalent
- Efforts to better facilitate the role of digital comparison tools in the sector
- Almost half of law firms use review sites, but opposition to comparison sites persists
- The Big Four accountancy firms are making major inroads in legal services sector
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LawTech Adoption in the Legal Services Sector
- Investment in legal technology remains key priority for legal services providers
- Adoption of generative AI tools
- Development of UK LawTech sector driven by incubator and accelerator programmes
- Deploying legal tech to address the legal needs of consumers and SMEs
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Regulatory and Legislative Changes
- Industry regulation
- Legal Services Act
- Legal Services Act opens up market to non-lawyers and leads to new business models
- Standards and Regulations reforms allow solicitors to work freelance and practise as solicitors from unregulated firms
- CMA’s package of measures aimed to help customers better navigate the market and get value for money
- CMA’s progress review of competition in legal market
- Legal Services Board sets out 10-year strategy for legal sector
- Court modernisation programme
- The impact of Brexit
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Market Drivers
- Residential and commercial property transactions
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- Figure 21: UK residential property transaction completions, by country, 2019-23 (number)
- Figure 22: UK residential property transaction completions, 2018-23
-
- Figure 23: UK non-residential property transaction completions, by country, 2019-23 (number)
- Figure 24: UK non-residential property transaction completions, 2018-23
- Trends in M&A activity
- Corporate credit conditions
- Following a record-breaking 2021, M&A activity cools down in 2022
-
- Figure 25: Mergers and acquisitions involving UK companies, 2009-22
- UK IPO activity slows in 2022
-
- Figure 26: Number of main market and AIM-listed companies, 2012-22
- Figure 27: Number of main market and AIM-listed companies, 2014-22
-
- Figure 28: Number of company IPOs on London Stock Exchange, 2016-22
- Private sector business population
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- Figure 29: Number of private sector businesses in the UK, 2008-22
- Figure 30: Number of private sector businesses in the UK, 2008-22
-
- Figure 31: Number of VAT and/or PAYE-registered enterprises in the UK, by broad industry group, 2016 and 2022 (number and %)
-
Industry Structure
- Different types of law firms in the UK
- Growing number of US firms moving into London
- Top 20 commercial legal firms
-
- Figure 32: UK top commercial law firms, by turnover, 2022
- The rise of alternative legal services providers
- Traditional firms learn from ALSPs and adapt business models
- Structure of UK legal activities industry
- Figure 33: Analysis of the changes in the structure of the UK legal activities industry, 2017-21 (number of local units and businesses)
- Solicitor firms
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- Figure 34: Number of practising solicitors in the UK, 2014-22 (number and % change)
- Figure 35: Population of practising solicitors, 2019-23
-
- Figure 36: Breakdown of solicitor firms, by type, 2023
- Practising barristers
- Figure 37: Total barristers in practice, 2017-22
- Structure by employment
- Figure 38: Analysis of the employment structure of the UK legal activities industry, 2020 and 2021 (local units and employees)
- Structure by turnover
- Figure 39: Analysis of the financial structure of the UK legal activities industry, 2019 and 2020 (£000 and number of companies)
-
Competitive Strategies
- A&O prioritises investment in its Advanced Delivery & Solutions capabilities
- Freshfields’ smarter service delivery through Freshfields Hub and Client Delivery Group
- Linklaters redesigns its Alternative Legal Services offering with work-from-anywhere staff
- CMS’s dedicated managed legal services and added-value services
- Dispersed law firms use technology and modern working practices to drive growth
-
Company Profiles
- Allen & Overy
- A&O plans to merge with Shearman & Sterling
- Advanced Delivery & Solutions
- Company strategy
- Financial performance
- Figure 40: Financial analysis of Allen & Overy, 2018-22 (£ million)
- Clifford Chance
- Company strategy
- Clifford Chance Tech Group advises clients on the risks and opportunities that technology brings
- Financial performance
-
- Figure 41: Financial analysis of Clifford Chance, 2018-22 (£ million)
- Figure 42: Turnover analysis of Clifford Chance, by geographic segment, 2022 (£ million and % of turnover)
- CMS Cameron McKenna Nabarro Olswang
- Financial performance
- Figure 43: CMS Cameron McKenna Nabarro Olswang, 2018-22 (£000)
- DLA Piper International
- DLA Piper’s tech-focused practices to meet the evolving needs of clients working with and in technology
- DLA Piper’s Law& enhanced legal offerings
- Company strategy
- Financial performance
- Figure 44: Financial analysis of DLA Piper International, 2018-22 (£ million)
- Freshfields Bruckhaus Deringer
- Smarter service delivery through Freshfields Hub and Client Delivery Group
- Company strategy
- Financial performance
- Figure 45: Financial analysis of Freshfields Bruckhaus Deringer, 2018-22 (£ million)
- Hogan Lovells International
- Company strategy
- Financial performance
- Figure 46: Financial analysis of Hogan Lovells International, 2017-21 (£000)
- Linklaters
- Limitless – Linklaters redesigned Alternative Legal Services capability
- Financial performance
- Figure 47: Financial analysis of Linklaters, 2018-22 (£ million)
- Norton Rose Fulbright
- Merger with US-based Chadbourne & Parke
- NRF Transform
- Company strategy
- Financial performance
- Figure 48: Financial analysis of Norton Rose Fulbright, 2018-22 (£000)
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Appendix – Data Sources, Abbreviations and Supporting Information
- Abbreviations
- Methodology
-
Further Sources and Contacts
- Regulatory bodies and professional associations
- Trade magazines
- Trade events
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