Abstract
MODEST MARKET GROWTH IN 2012 WITH NEW BUSINESS MODELS CHANGING THE UK LEGAL
MARKET LANDSCAPE
The UK Legal Services Market Report from IRN Research provides a market review
of the UK legal services market, a market that is experiencing fundamental
changes as new legal suppliers enter the market, some existing players change
their operating and business models, and new ways of delivering and using
legal services emerge.
The UK legal services market (including private practice firms, barristers,
patent agents, and other legal professionals) was valued at almost &poun;26bn
in 2010 and annual growth of 5% signalled a recovery after declining sales in
2009. In 2011, market growth is expected again but at a lower rate than 2010.
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.
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.
However, solicitor numbers are growing at the fastest rate outside private
practice and most notably in in-house corporate legal departments. Also
increasing very rapidly is the number of paralegals employed in law firms.
The period 2011-2012 is likely to be remembered as the period when the
transformation of the UK legal services market gathered pace. For some years,
there have been competitors to traditional law firms offering legal services
but the number of competitors is likely to increase led by the arrival of
Alternative Business Structures (ABS). From January 2012, these allow
non-lawyers to invest in law firms in England and Wales. Initially, the number
of businesses applying to become ABS is small but more are likely to come
forward in the next year or so.
Alongside ABS, other legal service models are appearing such as white-label
legal services from organisations such as the AA and Saga in conjunction with
law firms, branded franchise networks of high street law firms, and DIY online
legal services. Generally it is expected that it will be the smaller and
medium-sized law firms that face the most threat from these new supplies and
particular those that operate general practices covering various practice
areas. Areas such as conveyancing, wills, divorce are high-volume, low margin
sectors that involve a large amount of routine legal processing. So these
areas offer opportunities for commoditisation and economies of scale and
appeal to some of the new larger players entering the market. Volume suppliers
of these services amongst law firms are also doing well so smaller law firms
are fighting for a reduced share of the market.
Other issues likely to have an impact on the market in the coming months
include: new compliance demands on law firms and solicitors from a new
regulatory regime (Outcomes-focused regulations) introduced in October 2011;
the proposed ban on referral fees; a reduction in funding for legal aid.
The report has sections for industry overview, market sizes and trends, market
segmentation, key issues in the market, key players, PEST analysis, research
on client preferences for legal fees and law firm concerns, market forecasts
for 2012 and 2013. See Contents Pages below.
Table of Contents
Executive Summary
- 1. Industry Overview
- 1.1 Report Coverage & Introduction
- 1.2 Market Size
- 1.3 Market Characteristics and Trends
- 1.4 Market Segmentation
- 1.4.1 Work Areas
- 1.4.2 Market Segments
- Business/Corporate Affairs
- Personal Injury/Accident
- Commercial Property
- Residential Property
- 1.5 Industry Structure
- 1.6 Solicitor Numbers
2. Key Trends
- 2.1 Alternative Business Structures (ABS) -2012 start
- 2.2 ABS - big bang or quiet revolution?
- 2.3 Law firms and external investment
- 2.4 Outcomes-focused regulation
- 2.5 Abolition of referral fees
- 2.6 New professional indemnity insurance rules
- 2.7 Legal aid changes put back
- 2.8 Pressures on legal fees across the board
- 2.9 Consumer comparison and review sites
- 2.10 Legal process outsourcing (LPOs)
- 2.11 Claims Management Companies
3. Selected Bodies and Associations in Legal Services
4. PEST Analysis
- 4.1 Political
- 4.2 Economic
- 4.3 Social
- 4.4 Technological
5. IRN Primary Research
- 5.1 Introduction
- 5.2 Law Firm Survey
- 5.3 Consumer Survey
6. Competitive Structure
- 6.1 The Marketplace
- 6.2 Leading Law Firms
- 6.3 Top 5 Law Firms - Profiles
- Clifford Chance
- Freshfields Bruckhaus Deringer
- Linklaters
- Allen & Overy
- DLA Piper
- 6.4 Consumer Law - Selected Suppliers
- Accident Advice Helpline Direct
- Blakemores
- Cooperative Legal Services
- Countrywide Property Lawyers
- CPP Group
- DAS Legal Expenses Insurance Company
- Halifax Legal Express
- HighStreetLawyer.com
- InjuryLawyers4U
- Irwin Mitchell
- Last Cawthra Feather
- Minster Law
- National Accident Helpline
- Optima Legal
- Pannone
- Parabis Law
- Quality Solicitors
- Russell Jones & Walker
- Shoosmiths
- Walker Morris
7. Future Trends
- 7.1 General Trends
- 7.2 Forecasts 2012-2013
