The UK legal services market increased at an average annualised rate of 11% over the past six years, reaching a value of £26.1 billion in 2012, with B2B purchases dominating sales, accounting for 89% of total market value in 2012.
Legal services covers a wide range of professions and stakeholders, ranging from the judiciary, solicitors and barristers, to mediators and arbitrators.
The industry consists of nearly 30,000 companies, with a highly competitive environment. Around 83% of industry players are micro businesses employing fewer than 10 people. However, in revenue terms the power is heavily concentrated among the top players, with the largest 3% of law firms generating 55% of revenue in 2012.
Underlying this overall growth rate there are clear differences between the fortunes of the top 100 or so law firms and the long tail of 10,000-plus law firms and solicitors that make up the rest of the market.
Most of the top firms are out-performing the market overall in terms of revenue and profits growth while lower down the market many medium and smaller law firms are struggling to grow revenues significantly and are working on low margins.
The importance of London as a global financial and trading hub contributed to the development of some of the most prominent legal brands worldwide, such as Allen & Overy LLP, Clifford Chance and Linklaters LLP.
While changes in the market place are predicted to reduce the number of law firms and solicitors operating in the market, there are no signs of this yet.
The number of law firms in the UK is still growing and the number of practising solicitors has been rising year-on-year for the last five years and the overwhelming majority of these are still based in private practice.
For more information on the UK legal services market, see the latest research: UK Legal Services Market
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