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LEGAL SERVICES - UK - MAY 2018

Published By :

Mintel

Published Date : May 2018

Category :

Legal Services

No. of Pages : N/A

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.

Table of Contents

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

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