26th March 2018
UK Business Legal Services – IRN Research Market Report
STEADY GROWTH BUT INCREASED COMPETITION MEANS LAW FIRMS WILL HAVE TO BE MORE FLEXIBLE AND MARKET-SAVVY
The UK Business Legal Services Market Report is the second edition of an annual Legal Market Report from IRN Research and provides an overview of the market and its core market segments.
New content this year includes:
• A survey of 200 UK businesses (100 large/100 SME) on use of, and perceptions of, legal advisers.
• Analysis of the top 200 law firms, and leading chambers, and the specific verticals they advise.
Market size and segments
UK-based business law firms and chambers generated revenues of £15.4 billion in 2017, an increase of 4% on 2016 revenues. Some of this total includes international revenue but the UK legal business market was worth over £11 billion (turnover, less exports plus imports).
The two main segments of the business legal market are corporate/ commercial law and dispute resolution/litigation. Other important market segments are employment law, commercial property, mergers & acquisitions, and patents and trademarks.
IRN Research survey summary
There is likely to be a net increase in demand for business legal services in the next 18 months. A majority of businesses surveyed by IRN Research expect their demands for legal services to remain the same in the next 18 months. 29% of large businesses and 16% of small businesses are expecting an increase in their need for external legal advice, compared to 9% of large firms and 11% of small firms expecting a decrease.
Six out of ten small businesses use just one law firm for all their legal needs but a majority of large businesses are using more than one law firm.
Some businesses build a relationship with their legal adviser outside of a specific legal matter: 27% of individuals in small businesses come into contact with their legal adviser at business networking events, and 31% of individuals in large businesses attend events arranged by a law firm.
Sector expertise of top 200 UK law firms
Most of the top 200 UK law firms have created vertical sector teams to emphasise their expertise in specific sectors and to get closer to their clients in these sectors. IRN Research has looked at the websites of 182 of the top firms (i.e. those that list their sector expertise) to detail the key verticals covered. There are 13 vertical sectors listed by more than 50 law firms, led by real estate (101 firms), financial services & insurance (97 firms), and hospitality, leisure and sport (91 firms). Another 10 sectors reach double figures, i.e. mentioned by more than 10 firms.
Some vertical sectors are already starting to become crowded in terms of the number of law firms offering advice for the sector. The next step, starting to emerge, is a move to more niche sector expertise.
Our forecast for the market value of the business legal market shows steady growth in 2018 with higher growth expected in 2019.
• Law firms will have to become more flexible and market-savvy as competition increases. Major clients seek to unbundle more legal services by buying-in only certain legal services, and ALSPs take on more routine legal work and offer support services to corporates.
• Controlling costs will remain a top priority.
• There will be more mergers as firms seek to cut their back office, property and support costs and as UK firms become more attractive financial targets given the decline in the value of the pound. More UK mergers will create integrated professional services firms offering a range of support services particularly for SMEs.
• The development of vertical sector teams in law firms and the growth of niche/boutique law firms specializing in specific sectors or practice areas are likely to continue. Broad sector expertise may not be enough for some clients and more law firms are likely to focus on niche market segments.
The report (60pp, PDF), is available directly from IRN Research, priced at £350. UK sterling price is plus VAT so total price is £420. US$ price is US$500.
The report’s contents page is included on Page 3 of this release.
The UK Business Legal Services Market Report is one of a series of reports produced each year with others covering UK Legal Services Market, UK Medico-legal and Insurance Market, Clinical Negligence, Conveyancing, Family Law, Personal Injury and Wills and Probate. Reports provide details of: historical market size and trends; future trends and forecasts; industry opinion surveys; market drivers; key players; commentary on key issues impacting on the market.
INTELLIGENCE, RESEARCH, INSIGHT
Established in 1991, IRN Research is a market research consultancy with a particular focus on the legal services market. We offer a range of bespoke research services, on an ad-hoc and continuous basis, to law firms and suppliers to the sector. These services include client satisfaction surveys, market studies and competitor intelligence, client industry reports, and strategic studies.
IRN Research, 60 Eastern Green Road, Coventry, CV5 7LH, United Kingdom
Tel: +44(0)7905 239599. Email: firstname.lastname@example.org URL: www.irn-research.com
UK BUSINESS LEGAL SERVICES REPORT – CONTENTS
MARKET STRUCTURE AND TRENDS
The structure of the market
The key players
The top 200 – vertical sector expertise
Leading chambers – verticals
Still limited use of legal advisers by SMEs
New Business & Property Courts launched in 2017
Market for litigation funding continues to expand
Big commercial law firms not delivering value for money
Survey shows modest growth and limited use of advanced technology
Big four accountants are here
THE BUSINESS LAW MARKET
Turnover over £15bn and UK market of £11bn
A growing market but one that is increasingly competitive
Corporate/commercial law and litigation are key markets
SMEs are largest volume users but large companies spend big bucks
BUSINESS USER SURVEY
Less than 20% are regular users of external legal advice
Employment, pensions, contracts – main areas for advice
Most large firms use more than one law firm, most small businesses just one
Some networking between business users and legal advisers
Net increase in demand for legal services in next 18 months
Hourly rates still the fee model for a majority
Market forecasts 2017-2019
Law firms will have to be more flexible and market-savvy
Controlling costs will be a major priority
More specialist teams and niche practices
CORPORATE, FINANCIAL & COMMERCIAL LAW
INTERNATIONAL LITIGATION & DISPUTE RESOLUTION
INTELLECTUAL PROPERTY, PATENTS & TRADEMARKS
COMMERCIAL PROPERTY LAW