Brexit: Boosting competition work
The market for corporate, commercial and competition work is likely to “cool substantially” this year and next after the “ferocious” post-lockdown boom, new research has predicted.
A new set of challenges – including rising inflation, new regulations and sanctions, and the threat of a recession – appear to have stagnated growth for some, but not all, practice areas.
According to LexisNexis Legal & Professional’s latest Gross Legal Product Index, the post-lockdown boom that saw demand for legal expertise “go through the roof” in the second half of 2021 may be short-lived.
“After a ferocious post-Covid return to growth, the market is likely to cool substantially,” it said.
It described 2021 as a “momentous year” for the legal sector, bringing in “a jaw-dropping” £41.6bn in revenue (up from £36.8bn in 2020).
“This growth saw law firms of all sizes looking at new opportunities on both a national and international scale. Yet, a whole new set of challenges have come onto the scene. In the last six months alone we’ve seen sanctions, new regulations, rising inflation and the threat of a recession.”
The index predicted that demand for corporate law would decline by 22% in the whole of 2022 when compared to 2021. In 2023, this dip in demand was expected to stabilise, with a predicted 1% growth.
“Last year saw pent-up demand for corporate transactions and IPOs create a surge in activity, but 2022’s economically uncertain market has already taken a toll on the practice area,” LexisNexis said.
By contrast, commercial work has stayed steady this year and the index said it would rise 4% in 2023. “Demand is being driven by a rebound in activity for imports and exports, foreign investments and new companies being created.”
The more niche area of competition law is growing rapidly, however, up 17% for the full 2022 year, with a further 32% forecast for 2023.
The index said: “The UK’s departure from the EU, the Competition Markets Authority’s heightened stance towards competition enforcement, and new security and sustainability measures coming into play have created a hefty workload for competition lawyers.”
The report’s editor, Dylan Brown, said: “Today’s economically uncertain times have caused a great deal of unrest in the corporate world. There’s a constant barrage of conflicting reports coming out, and despite everything still being up in the air, the default setting for most businesses right now will be risk aversion.
“It will be up to lawyers to instill confidence by guiding clients through the months and years ahead with accurate insights on economic activity, new legislation and regulations, and worthwhile growth opportunities.”
The index is described as an evidence-based framework that pulls data from a wide range of publicly available sources.
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