The legal services market should see a year of steady growth in 2023, with corporate law the main driver, and family law and probate demand also strong, new research has predicted.
IRN Legal said the market increased by 6.3% to £43.9bn in 2022, of which £31.6bn (up 10%) was generated by the largest 100 firms – and £17.2bn (up 8.7%) by the top 10 alone.
It forecast a compound annual growth rate of 5.46% for the coming years, including 2023.
“The corporate law market should continue to show healthy growth in 2023 and the commercial property law market will gather pace later in 2023,” it said.
It attributed the former to “relatively strong M&A activity in Europe and beyond” and tax breaks announced in this month’s Budget to boost corporate investment, while newer demands included “further environmental, social and corporate regulatory and compliance questions”, cyber security and data breaches and continuing Covid-related issues.
“There are likely to be mixed fortunes for specific consumer law sectors: family law along with wills and probate are expected to experience the strongest growth.” The former was benefitting from the introduction of non-fault divorce, and the latter from an ageing population and increasing levels of dementia.
IRN’s annual UK Legal Services Market report found that legal advice for business and commercial matters (including commercial property) increased its share of the overall market, of which it is the largest segment, by a percentage point to over 48% in 2022.
This was made up of £15.7bn from corporate/commercial work and a further £5.5bn from commercial property.
The core consumer law market value was estimated at over £17bn in 2022, with personal injury/clinical negligence – despite a difficult year following the launch of the Official Injury Claim portal – the largest segment, valued at £4.1bn, followed by employment (£3.3bn), family (£3bn), residential conveyancing (£2.5bn), private client (£2.5bn) and crime £1.9bn.
IRN said family and employment were the best-performing consumer law sectors over the last year.
In 2022, prices of legal services increased by 5.2% compared to the previous year, which in turn represented a 5% rise.
IRN also predicted that multi-disciplinary practices that included legal services would continue to grow.
Highlighting the likes of Ampa and Progeny, it said: “Most of these businesses are expected to grow even further plus other integrated businesses emerging in specific legal practice areas, for example business groups offering services through the personal injury/serious accident claims journey (i.e. legal alongside accident management, medical care and rehabilitation, insurance etc), and financial and tax planning consultancies incorporating wills and estate planning advice.”