Five successive years of growth in the legal sector increases the need to secure the best business deal possible in Brexit negotiations, a study out today argues.
The research by TheCityUK found gross fees for UK-based legal services firms had risen by 1.3 per cent to £30.9bn in 2014-15, while the sector contributed £25.7bn – or 1.6 per cent of GDP – to the country's economy in 2015.
According to the report, the UK's legal sector is now only second in size to the US and accounts for roughly 10 per cent of the global legal market, while net exports of UK legal services increased by 11 per cent to £3.6bn in 2014.
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"The UK is the leading global centre for the provision of international legal services and dispute resolution, employing over 314,000 people and bringing significant benefits to the wider economy," explained Chris Cummings, chief executive of TheCityUK. "Securing this position should be a priority for the forthcoming Brexit negotiations.
"This means maintaining the strongest possible trading links with the EU and beyond and ensuring the UK remains a globally attractive place in which and from which to do business."
However, it's not just Brexit that could be keeping lawyers up at night. The research also identified a need for the legal sector to innovate to keep pace in an increasingly competitive arena.
For example, alternative business structures now allow non-lawyers to own or invest in legal firms. Since the first such licence was granted in 2011, a number of non-law firms have been getting in on the legal action, including many of the big accountancy firms.
"These changes are accelerating the need for law firms to innovate and reconsider their offering and potential client base," Cummings added. "We’re also seeing an increasing number of large firms choosing to locate operations in cities across the UK to take advantage of the skilled workforce and lower labour costs.
"These trends are important to support and, alongside ensuring a good deal for UK financial and related professional services in the EU negotiations, will ensure that the UK continues to be seen as a genuinely competitive and world leading place to do business."