Global trade: Value of legal services market set to rearch $950bn in 2027
Gross UK exports of legal services reached a new high of £9.5bn in 2023 as the law’s contribution to the economy continues to rise, new research has shown.
Overall, revenue generated by UK-based legal services increased by 7.7% year on year to £47.1bn in 2023, according to financial lobby group TheCityUK, making the UK the second largest legal market in the world after the US.
The global legal services market grew to $765bn in 2022 and is predicted to reach $950bn by 2027.
TheCityUK’s 13th annual report on UK legal services said law firms were responsible for the vast majority of exports, with barristers/advocates contributing £116m and lawyers in other organisations (including patent agents) £118m.
Taking account of imports – mainly related to billings of UK businesses from law firms based overseas – net exports stood at £7.6bn, an annual increase of 14%. In the past 10 years, net UK exports of legal services have risen by more than 80%.
The report said over 368,000 people were employed in legal services across the country: 133,000 of them in London, followed by Manchester (13,000), Birmingham (12,000), Leeds (9,000), and Edinburgh and Glasgow (7,000 each).
There are more than 7,000 foreign lawyers practising in England and Wales, while over 200 international law firms have an office here.
International parties continue to flock to the UK courts: in 2023, 75% of case in the Patents Court, 64% in the Commercial Court and 54% in the Competition List had at least one international party.
The number of barristers in England and Wales who act for clients located abroad has more than doubled over the past decade; around 2,500 now receive instructions from abroad, earning more than £506m in revenues in 2023.
Meanwhile, there are more than 6,500 solicitors of England and Wales, and 800 solicitors of Scotland, working abroad.
Over 28,600 civil disputes were resolved in the UK through arbitration, mediation and adjudication in 2023.
The report also highlighted the UK’s importance for lawtech, home to 44% of all startups in Europe and 356 companies attracting £5.5bn of investment in 2023 (mostly non-UK headquartered though – the 254 UK-founded startups secured £1.4bn of the investment).
It said Belfast was emerging in particular as a leading centre for legal innovation and lawtech.
Among the challenges the report said still faced the profession were the underrepresentation of women in senior leadership roles and an even greater gender disparity in lawtech founders. According to LawTechUK, female founders lead only 14% of lawtech ventures and struggle to secure funding, with all-female founder teams receiving only 2p for every £1 of equity investment in the UK in 2021.
Lord Chancellor and justice secretary Shabana Mahmood commented: “Not only is the legal services sector a huge contributor to the economy in its own right, it is also a facilitator for wider trade and investment across a whole host of different sectors.
“Key to our growth mission is ensuring that the legal services sector continues to go from strength to strength. This year’s report findings reinforce our steadfast commitment to the rule of law, respect for international standards and the UK’s status as a world-leading legal services hub.
“We remain dedicated to promoting our legal expertise and strengthening the international influence of English and Welsh law around the world.”
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