Value of legal services market “to hit £50bn” this year


City: Commercial work makes up about half of value of UK legal market

The legal services market will continue to grow in 2024, hitting a turnover of £50bn with a “resilient” corporate law sector boosted by “stronger economic conditions” later in the year.

IRN Legal said family, employment and private client lawyers would lead the way in consumer law, with residential conveyancing recovering “after a dismal 2023” and personal injury remaining “the weakest performer”.

Researchers said the UK legal services market grew by 8.3% last year at current prices, reaching £47.5bn.

Market turnover was expected to grow to £50.3bn this year, at a rate “just below the level” recorded last year, £53.5bn in 2025, £57.5bn the following year and £61bn in 2027.

Legal advice for business and commercial matters (including commercial property) was the largest market segment, accounting for almost 50% (£23.4bn) of the whole.

The core consumer law market value was estimated at over £18bn in 2023, with personal injury/accident/medical negligence work the biggest segment, valued at over £4bn, followed by family law and employment law.

‘Other legal services’ – such as immigration and intellectual property – accounted for the remaining £5.9bn.

IRN predicted that merger and acquisition activity in the consumer law market would “continue at the pace set in 2023, with private equity investors expected to maintain their interest” in the sector.

“In virtually all consumer law sectors consolidation will continue and volume players will increase their market shares.

“We can also expect growing interest in employee ownership trusts as a model for a legal business, and growing enthusiasm to obtain B Corp certification for other firms.”

M&A activity more broadly was expected to “witness a bounce back in 2024” across the globe, with improvements in economic and financial conditions later in the year “likely to boost corporate investment”.

This would contribute to growth in corporate law, particularly in corporate restructuring advice, insolvency law as the level of business closures remains high, and corporate clients seeking more advice on the application of artificial intelligence.

IRN’s annual UK Legal Services Market Report predicted “steady growth” in the family law market, as categories such as financial remedies after a divorce, domestic abuse, and Children Act matters continued to generate demand.

“The rush to file for divorce after the introduction of no-fault divorce has calmed down, although there is still a need to process a backlog which will delay legal fee payments for advisers.”

Despite “limited growth” in the core will-writing market, growth in the private client sector would come from complex wills and estates, advice on lasting powers of attorney and other services such as funeral and care plans.

This would be coupled with continued growth in contentious wills and probate advice.

The “highly competitive” employment law sector was also likely to perform well this year, with demand continuing to grow as new employment legislation appeared. Restructuring and attempts to change terms and conditions were likely to create more disputes.

After “almost two years in the doldrums”, conveyancers would be “hoping for better prospects in 2024 and beyond”. Although, in the short term, the omens were “not that good given that interest rates are still relatively high”, rates were expected to start to fall later in 2024.

In the personal injury market, some providers were “still deciding whether to leave” or at least reduce their presence in some segments of the market, such as low-value claims.

“Some of the larger players have left the small claims market completely while some of their counterparts are buying up small claims books to increase their presence in this sector of the market.

“Motor claims are in decline and claims are also decreasing in most other market segments placing more competitive pressures on providers fighting for a share of a smaller market.”

Researchers added that “negligible market growth” was expected to continue into 2024 and 2025, though some providers were posting good results and had expansion strategies for the next three to five years.




Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blog


Shocking figures suggest divorce lawyers need to do more for clients

There are so many areas where professional legal advice requires complementary financial planning and one that is too frequently overlooked is on separation or divorce.


Is it time to tune back into radio marketing?

How many people still listen to the radio? More than you might think, it seems. Official figures show that 88% of UK adults tuned in during the last quarter of 2023 for an average of 20.5 hours each week.


Use the tools available to stop doing the work you shouldn’t be doing anyway

We are increasingly taken for granted in the world of Do It Yourself, in which we’re required to do some of the work we have ostensibly paid for, such as in banking, travel and technology


Loading animation