Conveyancing: Market picking up
The UK legal services market grew by 10% to £52bn last year and is heading towards a strong 2025 too, according to new research.
This was despite the number of solicitors’ firms in England and Wales falling by 11%, over five years – although the number of solicitors grew by 14%.
IRN Legal Reports’ UK Legal Services Market 2025 predicted further market growth of 8% this year and said its latest forecasts “are our most optimistic for some time”, with most practice areas likely to see improved growth in 2025.
The exception, as in previous reports, was the personal injury market, where motor claims continue to fall, although there has been some growth in clinical negligence claims.
“For the first time in two years, the forecast is also predicting good growth in the residential conveyancing market, although this practice area is the one where there is still the possibility of serious bumps along the way: interest rates are likely to continue to fall albeit only slowly but uncertainty over inflation trends and where price increases will be in a few months.”
Legal advice for businesses accounted for 51% of the market, slightly up on 2023 – £19.5bn in corporate/commercial work and £7bn in commercial property.
The core consumer law market value was estimated at £19bn in 2024 and, despite its weak growth in recent years, the largest segment was still personal injury/accident/medical negligence work, valued at £4.4bn.
Family law and employment law were the next largest segments, valued at £3.4bn and £3.7bn respectively, followed by probate, wills and trusts (£2.8bn), conveyancing (£2.4bn) and crime (£2.2bn).
‘Other legal services’ accounted for the remaining £5.9bn, with immigration and intellectual property among the key markets.
In the five years to December 2024, the number of solicitors’ firms in England and Wales has fallen by almost 1,100 to 9.179, but the number of solicitors with practising certificates increased by 14% to 167,034, equivalent to an additional 21,000 individuals.
Consumer law sectors have taken “the brunt of the decline in law firms” as consolidation has increased in many practice areas, according to IRN.
While 2023 was “something of a watershed”, with much more private equity investment in the sector than in previous years, but private equity had an even more prominent role last year.
IRN said that, of all the mergers and acquisitions since the 2024 report, around 25% involved either new investments by private equity businesses or law firms already with private-equity backing.
When a decade ago the majority of law firms were partnerships, they accounted for just 16% last year, while an ever-increasing 57% were incorporated instead.
The top 100 firms recorded revenue growth of 9.8% in the 2023/24 financial year, improving from 6.7% in the previous 12 months to a total of £37bn.
The top 100 increased profit per equity partner (PEP) by an average of 13%, “with near across-the-board hikes coming despite the rising costs of associate salaries”.
On the back of double-digit revenue growth for more than half of the top 100, average PEP rose to £844,000 after profitability had remained effectively flat during 2022-23.
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