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UK Legal Services market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Legal Services market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Scope of Report

This report addresses the following key questions concerning the UK legal services market:

  • How has the market performed over the past five years?
  • How are legal service providers responding to increased competitive pressures?
  • What are the implications of Brexit on the sector?
  • What is the outlook for the market over the next five years?

Expert analysis from a specialist in the field

Written by Claudia Preedy, a leading analyst in the B2B sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Competition in the UK legal services market is expected to further intensify over the coming years, driven by new entrants, rapidly evolving technology, innovation in business models, and changing client buying patterns. The more competitive market also means that technology and innovation will play a key role in ensuring that firms thrive in an ever-changing environment. Firms need to be highly agile, not only responding to current factors impacting the market, but also anticipating the next likely developments. Claudia Preedy
B2B Analyst

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Table of contents

  1. Executive Summary

      • The market
        • Figure 1: Turnover of UK legal services industry, 2013-17
        • Figure 2: Turnover of UK solicitor firms, by type of work, 2017
      • Market factors
        • Companies
          • Figure 3: Breakdown of Solicitor Firms, March 2014 and February 2018
        • What we think
        • Key Insights

            • 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

                      • Definitions
                        • Methodology
                          • Abbreviations
                            • Market positioning
                            • UK Economy

                              • Overview
                                • Figure 4: Forecast GDP development 2016-22
                                • Figure 5: Output components percentage contribution to UK GDP growth, quarteronquarter, 2016-17
                              • Inflation
                                • Interest rates
                                  • House prices
                                    • Figure 6: UK House price changes, 2007-2017
                                  • Consumer spending
                                    • Manufacturing
                                      • Figure 7: UK manufacturing, 2015-18
                                    • Business investment
                                      • Figure 8: UK GFCF, chained volume measures, seasonally adjusted, 2004-17
                                    • Imports
                                      • Exports
                                      • Market Factors

                                        • 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
                                                                  • Figure 9: UK residential property transaction completions, by country, 2013-17
                                                                  • Figure 10: UK residential property transaction completions, 2013-17
                                                                  • Figure 11: UK non-residential property transaction completions, by country, 2013-17
                                                                  • 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
                                                                    • Figure 13: Mergers and acquisitions involving UK companies, 2005-17
                                                                  • Number of listed companies on a downward trend
                                                                    • Figure 14: Number of main market and AIM listed companies, 2009-17
                                                                    • Figure 15: Number of main market and AIM listed companies, 201017
                                                                    • Figure 16: Number of company IPOs on London Stock Exchange, 201217
                                                                  • Rise in active businesses as UK economic recovery becomes more robust
                                                                    • Figure 17: Number of private sector businesses in the UK, 2003-17
                                                                    • Figure 18: Number of private sector businesses in the UK, 2003-17
                                                                    • 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

                                                                        • 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
                                                                                      • Figure 20: Turnover of the UK legal services industry, 2013-17
                                                                                      • Figure 21: Turnover of UK legal services industry, 2013-17
                                                                                  • Market Segmentation

                                                                                    • Key points
                                                                                      • Market segmentation by profession
                                                                                          • Figure 22: Turnover of UK legal services industry, by type of business, 2013-17
                                                                                        • Segmentation by category of work (solicitors only)
                                                                                          • Figure 23: Turnover of UK solicitor firms, by type of work, 2017
                                                                                          • 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
                                                                                          • Figure 26: Top sources of business demand for legal services
                                                                                        • Conveyancing market
                                                                                            • Figure 27: Average number of transactions by Conveyancing firms, 201117
                                                                                          • Wills & Probate
                                                                                            • DIY probate gains in popularity, but opportunities for professionals remains
                                                                                              • 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
                                                                                                                  • Figure 29: Regional analysis of the UK legal services sector , 2016
                                                                                                                • Overseas trade in legal services
                                                                                                                  • Figure 30: International trade in legal services, 2009-16
                                                                                                                  • Figure 31: Net exports of legal services, 200816
                                                                                                              • Market Trends

                                                                                                                • 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

                                                                                                                              • 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
                                                                                                                                          • Figure 32: UK top commercial law firms, by turnover, 2017
                                                                                                                                        • Structure of UK legal activities industry
                                                                                                                                          • Figure 33: Analysis of the changes in the structure of the UK legal activities industry, 2013-17
                                                                                                                                        • Solicitor firms
                                                                                                                                          • Figure 34: Number of practising solicitors in the UK, 2011-17
                                                                                                                                          • Figure 35: Population of Practising Solicitors, 201318
                                                                                                                                          • Figure 36: Breakdown of Solicitor Firms, by type, March 2014 and February 2018
                                                                                                                                        • Practising barristers
                                                                                                                                          • Figure 37: Total barristers in practice, 2012-17
                                                                                                                                        • Structure by employment
                                                                                                                                          • Figure 38: Analysis of the employment structure of the UK legal activities industry, 2016 and 2017
                                                                                                                                        • Structure by turnover
                                                                                                                                          • Figure 39: Analysis of the financial structure of the UK legal activities industry, 2015 and 2016
                                                                                                                                      • Company Profiles

                                                                                                                                        • Allen & Overy

                                                                                                                                            • Company strategy:
                                                                                                                                              • Advanced Delivery
                                                                                                                                                • Harnessing technology and innovation
                                                                                                                                                  • Figure 40: Financial Analysis of Allen & Overy, 2013-17
                                                                                                                                                  • Figure 41: Allen & Overy practice breakdown by sector, 2017
                                                                                                                                              • Clifford Chance

                                                                                                                                                  • Company strategy:
                                                                                                                                                      • Figure 42: Financial Analysis of Clifford Chance, 2013-17
                                                                                                                                                      • Figure 43: Turnover analysis of Clifford Chance, by geographic segment, 2017
                                                                                                                                                  • CMS Cameron Mckenna Nabarro Olswang

                                                                                                                                                        • Figure 44: Financial Analysis of CMS Cameron McKenna Nabarro Olswang , 2013-17
                                                                                                                                                    • Dentons UK and Middle East

                                                                                                                                                        • Company strategy:
                                                                                                                                                            • Figure 45: Financial Analysis of Dentons UK and Middle East , 2013-17
                                                                                                                                                        • DLA Piper International

                                                                                                                                                            • Company strategy:
                                                                                                                                                                • Figure 46: Financial Analysis of DLA Piper International, 2013-17
                                                                                                                                                                • Figure 47: Turnover analysis of DLA Piper International, by geographic segment, 2015
                                                                                                                                                            • Freshfields Bruckhaus Deringer

                                                                                                                                                                • Company strategy:
                                                                                                                                                                  • Figure 48: Financial Analysis of Freshfields Bruckhaus Deringer, 2013-17
                                                                                                                                                              • Herbert Smith Freehills

                                                                                                                                                                  • New global alternative legal services business launched in 2015
                                                                                                                                                                    • Beyond 2020 Global Strategy
                                                                                                                                                                      • Figure 49: Financial Analysis of Herbert Smith Freehills, 2013-17
                                                                                                                                                                  • Hogan Lovells International

                                                                                                                                                                      • Company strategy:
                                                                                                                                                                        • Figure 50: Financial Analysis of Hogan Lovells International, 2012-16
                                                                                                                                                                    • Linklaters

                                                                                                                                                                        • Company strategy:
                                                                                                                                                                            • Figure 51: Financial Analysis of Linklaters, 2013-17
                                                                                                                                                                        • Norton Rose Fulbright

                                                                                                                                                                            • Company strategy:
                                                                                                                                                                                • Figure 52: Financial Analysis of Norton Rose Fulbright, 2013-17
                                                                                                                                                                            • Slaughter and May

                                                                                                                                                                              • Market Forecast

                                                                                                                                                                                • Key points
                                                                                                                                                                                  • The Market 2018-22
                                                                                                                                                                                    • The Brexit effect
                                                                                                                                                                                        • Figure 53: Forecast turnover of the UK legal services industry, 2018-22
                                                                                                                                                                                        • Figure 54: Forecast turnover of the UK legal services industry, 2018-22
                                                                                                                                                                                    • Further Sources & Contacts

                                                                                                                                                                                      • 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