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Legal Services - UK - May 2016

Published By :

Mintel

Published Date : May 2016

Category :

Banking

No. of Pages : N/A

The adoption of Alternative Business Structures (ABS) has not resulted in an immediate transformative change in the legal services industry. However, it has started to drive much needed innovation to the legal sector, with firms delivering more client focussed and cost effective services as competition starts to intensify. Some traditional law firms are responding to these changes by introducing new business models, new routes to market, and new ways of working.

Table of Content

Executive Summary

The market
Figure 1: Turnover of UK legal services industry, 2011-15
Figure 2: Turnover of UK solicitor firms, by type of work, 2015
Market factors
Companies
Figure 3: Breakdown of solicitor firms, March 2014 and February 2016
What we think

Key Insights

To date, what has been the impact of ABS 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

Definitions
Methodology
Abbreviations
Market positioning

UK Economy

Overview
Figure 4: UK GDP quarterly development, 2003-16
Figure 5: UK GDP in economic downturns and recoveries since 1979
Inflation
Interest rates
House prices
Figure 6: UK house price changes, 2004-16
Consumer spending
Manufacturing
Figure 7: UK manufacturing, 2013-16
Business investment
Figure 8: UK GFCF 2003-15
Imports
Exports

Market Factors

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
CMA launches study into legal services market
Legal Aid, Sentencing and Punishment of Offenders Act cuts legal aid funding
Government scraps major reform of Legal Aid system in England and Wales
Rise in court fees may deter users from bringing high value disputes to London
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, 2011-15
Figure 10: UK residential property transaction completions, 2011-15
Figure 11: UK non-residential property transaction completions, by country, 2010-15
Figure 12: UK non-residential property transaction completions, 2011-15
Trends in M&A activity
Figure 13: Mergers and acquisitions involving UK companies, 2004-15
Number of IPOs down in 2015
Figure 14: Number of main market and AIM listed companies, 2008-15
Figure 15: Number of main market and AIM listed companies, 2008-15
Figure 16: Number of company IPOs on London Stock Exchange, 2011-15
Rise in active businesses as UK economic recovery becomes more robust
Figure 17: Number of private sector businesses in the UK, 2001-15
Figure 18: Number of private sector businesses in the UK, 2001-15
Figure 19: Number of VAT and/or PAYE registered enterprises in the UK, by industry group and turnover size band, 2015
Public and political scrutiny surrounding corporate tax
Measures put in place to crack down on tax avoidance

Market Size

Key points
Overview
Legal services sector undergoing a period of gradual but significant change
Downward pressure on prices for legal services is forcing firms to evolve business models
Mid-tier firms have emerged stronger following the recession
Figure 20: Turnover of the UK legal services industry, 2011-15
Figure 21: Turnover of UK legal services industry, 2011-15

Market Segmentation

Key points
Market segmentation by profession
Figure 22: Turnover of UK legal services industry, by type of business, 2011-15
Segmentation by category of work (solicitors only)
Figure 23: Turnover of UK solicitor firms, by type of work, 2015
Figure 24: Turnover of UK solicitor firms, by type of work, 2015
Figure 25: Breakdown of UK solicitor firms, by type of work, as of January 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, 2011-15
Wills & Probate
Wills market offers considerable growth potential
Probate market sees shift towards DIY, but opportunities for professionals remains
Figure 28: Number of applications for grant representation, 2010-13
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
Figure 29: Regional analysis of the UK legal services sector , 2015
Overseas trade in legal services
Figure 30: International trade in legal services, 2010-14
Figure 31: Net exports of legal services, 2007-14

Market Trends

Key points
Increased demand for non-traditional legal services
Trend towards unbundling of legal services continues
Pricing pressures and the continued shift towards the fixed pricing model
Legal services providers face increased competition from accountants
Firms move towards more integrated service offerings
Current technological developments in the legal services sector
Growth in DIY law set to continue
Online dispute resolution and proposed online court
International presence of law firms is becoming increasingly important
SME business sector offers growth potential

Industry Structure

Key points
Industry development
Types of legal service providers is highly diverse
Rise in the number of overseas law firms in London
Top 20 commercial legal firms
Figure 32: UK top commercial law firms, by turnover, 2015
Structure of UK legal activities industry
Figure 33: Analysis of the changes in the structure of the UK legal activities industry, 2011-15
Solicitor firms
Figure 34: Number of practising solicitors in the UK, 2011-15
Figure 35: Population of practising solicitors, 2009-16
Figure 36: Breakdown of solicitor Firms, by type, March 2014 and February 2016
Practising barristers
Figure 37: Total barristers in practice, 2010-14
Structure by employment
Figure 38: Analysis of the employment structure of the UK legal activities industry, 2014 and 2015
Structure by turnover
Figure 39: Analysis of the financial structure of the UK legal activities industry, 2014 and 2015

Company Profiles

Allen & Overy

Company strategy
Figure 40: Financial analysis of Allen & Overy, 2011-15
Figure 41: Allen & Overy practice breakdown by sector, 2015
Figure 42: Allen & Overy practice breakdown by geographic segment, 2015

Clifford Chance

Company strategy
Figure 43: Financial analysis of Clifford Chance, 2011-15
Figure 44: Turnover analysis of Clifford Chance, by geographic segment, 2015

CMS Cameron McKenna

Company strategy:
Figure 45: Financial analysis of CMS Cameron McKenna, 2009-13

Dentons UKMEA

Company strategy
Figure 46: Financial analysis of Dentons UKMEA, 2011-15

DLA Piper International

Company strategy
Figure 47: Financial analysis of DLA Piper International, 2011-15
Figure 48: Turnover analysis of DLA Piper International, by geographic segment, 2015

Freshfields Bruckhaus Deringer

Recent company developments
Company strategy
Figure 49: Financial analysis of Freshfields Bruckhaus Deringer, 2011-15

Herbert Smith Freehills

New global alternative legal services business launched in 2015
Figure 50: Financial analysis of Herbert Smith Freehills, 2011-15

Hogan Lovells International

Company strategy
Figure 51: Financial analysis of Hogan Lovells International, 2011-15

Linklaters

Company strategy
Figure 52: Financial analysis of Linklaters, 2011-15

Norton Rose Fulbright

Company strategy
Figure 53: Financial analysis of Norton Rose Fulbright, 2011-15

Slaughter and May

Market Forecast

Key points
The market 2016-20
Technological developments
Fixed-fees services structure becoming common place
Competition from non-legal firms set to further intensify
Figure 54: Forecast turnover of the UK legal services industry, 2016-20
Figure 55: Forecast turnover of the UK legal services industry, 2016-20

Further Sources and Contacts

Regulatory bodies and professional associations
Trade exhibitions
Trade magazines

List of Table

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