The foundations of any transaction in a market economy are based on one simple thing: trust. And key to this is the legal system that enforces that trust – by making sure that both sides know exactly what they are getting into, and how any problems that might arise can be resolved.
As a nation, we have a lot to celebrate in our own legal sector. The entire industry was worth over £20bn to the UK last year. Not only are the costs cheaper by around a fifth when compared to Europe, but disputes are resolved two months quicker than the global average. London alone is home to over half of the world’s law firms. It is also worth noting that the UK has roughly the same market share of international and legal work as the US legal profession, although the latter is 10 times as big as the UK’s sector.
Why is this? Well, as the General Counsel of Tata Industries in Mumbai has said: “as part of a reliable and trusted legal system, English lawyers have incredible added value in terms of their international know-how. They can make scarce resources go further, manage risk better, and make deals happen faster. They help to keep the legal bills down”.
That is why it is so apt that the capital will be hosting the three-day Global Law Summit, kicking off on 23 February. This one-off business forum will bring high-level speakers and others under one roof – from the world’s pre-eminent practitioners and academics to business leaders and justice ministers from some 60 countries.
Not only does this provide us with an opportunity to celebrate the 800th anniversary of Magna Carta, embrace our legal history and reflect on one of the West’s most famous legal foundations – the right of everyone to equality before the law – but it also provides an excellent occasion to debate and discuss the future challenges and opportunities that the sector will encounter in the 21st century.
Many of my previous columns have focused on one of the cogs of business world, in the form of finance. However, the rule of law is the lubricant which helps turn these cogs and drives the engine of economic growth. Without it, the engine will stall.
It is something that is frequently raised on my overseas visits. Another is that a poor legal system in a particular country can harm two-way trade. A slow and uncertain legal process discourages inward investment and puts businesses off from making the bold step to enter a market and start trading. That is why, since 1215, English commercial law has been one of our best exports as a nation. Where we lead, others have followed in developing their own legal systems – because English law is an excellent foundation for the major international firms which congregate in London.
As one of the largest international legal events to take place anywhere in the world, this unique collaboration between legal professionals, business and government is an opportunity not to be missed. We look forward to welcoming many of the world’s leaders in this field to London to contribute to the debate – and facilitate the development of relationships across markets and jurisdictions.